Budget concerns

THE IMF’s criticism of Pakistan’s reckless budget for fiscal year 2023-24 carries profound risks for the economy. The June 30 deadline for meeting the lender’s conditions to unlock funding will likely be missed unless the government agrees to review the document and remedy its weaknesses. It would not be surprising if it does so, considering that it had to hurriedly, but comprehensively, revise its budget for the outgoing year to accommodate the IMF’s concerns for the resumption of its funding programme when Miftah Ismail was at the helm of the finance ministry. Responding to the Fund’s concerns, Finance Minister Ishaq Dar told senators yesterday that Pakistan “cannot accept everything from the IMF”. So, what would be the consequences if the government fails to pull off the deal? In the best-case scenario, Pakistan would struggle throughout the next fiscal to seek bilateral debt relief and secure fresh loans and rollovers of existing ones to meet its external debt obligations of $23bn.