ISLAMABAD: Prime Minister Shehbaz Sharif is resisting the International Monetary Fund’s (IMF) diktat to increase tax on Pakistan’s salaried class and agricultural products in the upcoming federal budget, a government official confirmed recently, as the government prepares to release the annual document detailing Pakistan’s estimated revenues and expenditures for the upcoming fiscal year later this week.
Pakistan’s government is gearing up to present the budget for the fiscal year 2024-25 on June 12. The development takes place as the South Asian country remains locked in negotiations with the IMF for a fresh financial bailout program that Islamabad considers necessary to avert a macroeconomic crisis. Pakistan’s economic crisis has seen its reserves drop to alarmingly low levels and its currency significantly weaken against the US dollar over the last two years.
Islamabad has taken painful measures demanded by the IMF since 2022, which include hiking fuel and energy prices in return for the financial institution’s help. These decisions caused prices of essential commodities to skyrocket in the country, with inflation surging to 38 percent in May 2023 before dropping to a 30-month low of 11.8 percent in May 2024.
“The prime minister is not ready to follow the IMF diktat to raise income tax on salaried class,” Rana Ihsan Afzal, the coordinator to the prime minister who is involved in the budget’s preparation process, told Arab News on Sunday.
“The IMF wants us to impose tax on agricultural products including tractors and even seeds but the prime minister has been resisting all this,” he said. Afzal added the government would initiate measures to ensure the agriculture and industrial sectors of the country flourish rather than impose additional taxes on them.
Afzal said the government would protect lifeline utilities consumers in the budget and increase the allocation for the Benazir Income Support Program (BISP), a federal unconditional cash transfer poverty reduction scheme.
“We are going to offer incentives to the industry to boost our exports and create job opportunities for the youth,” he said.
About the IMF’s proposal to levy a tax on pensions, he said the government was looking into different options to deal with the situation. He said the prime minister was mostly not in favor of the decision.
“We will be announcing an increase in pensions and salaries in the budget,” Afzal vowed, saying that the government was trying to present a “people-friendly” budget.
The Sunni Ittehad Council (SIC), a major opposition party backed by former prime minister Imran Khan’s candidates, said the government was “clueless” about the budget, claiming it would present a document that has been prepared by the IMF for parliament’s approval.
“The government has not consulted opposition parties about the budget’s preparation but we knew that this was going to be a tough budget for the public,” Zartaj Gul Wazir, an SIC lawmaker, told Arab News.
“As the opposition we will not only present our budget proposals in parliament but also force the government to review its anti-public measures,” she said. Wazir lamented that the economy had nosedived and the government did not have a cogent plan to revive it.
Meanwhile, Afzal said the government would welcome the opposition’s budget proposals after it would table the finance bill in the National Assembly.
“The opposition will be able to debate on the financial plan and forward its proposals to the government before the budget is passed,” Afzal said, adding that the government had consulted all other stakeholders, including those from various industries, for the budget’s presentation.
Pakistan PM resisting IMF diktat on increasing tax on salaried class in budget — official
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Pakistan PM resisting IMF diktat on increasing tax on salaried class in budget — official
- Pakistan is expected to release federal budget for upcoming fiscal year in National Assembly on June 12
- Opposition lawmaker vows to force government to review “anti-public measures” in the fiscal budget
Pakistan expects $40 billion as World Bank announces decade-long development framework
- World Bank Group’s Country Partnership Framework is designed to support inclusive and sustainable growth
- The framework aims to focus on education, health care, environmental resilience and financial management
ISLAMABAD: The World Bank Group’s (WBG) Boards of Executive Directors on Tuesday announced a decade-long Country Partnership Framework (CPF) for Pakistan, a plan the administration in Islamabad hopes will channel $40 billion in economic support to drive inclusive and sustainable development.
The country plan is a strategic framework that shapes the WBG’s long-term engagement with a country. It is built on a thorough assessment of the nation’s critical challenges and opportunities, ensuring that the group’s financial, technical and advisory resources are precisely aligned with the country’s development priorities for optimal impact.
According to the World Bank, the new framework for Pakistan targets six major areas, including education, health care, environmental resilience and financial management.
“Our new decade-long partnership framework for Pakistan represents a long-term anchor for our joint commitment with the Government to address some of the most acute development challenges facing the country,” said Najy Benhassine, World Bank Country Director for Pakistan. “Support to policy and institutional reforms that boost private sector-led growth and create fiscal space to finance the investments needed to address these challenges will remain key in our engagements.”
According to a statement from Pakistan’s Economic Affairs Division, the World Bank and its partner institutions have committed a total of $40 billion under the framework. This includes $20 billion from the International Development Association (IDA) and the International Bank for Reconstruction and Development (IBRD), while an additional $20 billion will come from the International Finance Corporation (IFC), which focuses on private sector development.
The WBG noted that the country plan aims to reduce child stunting by improving access to clean water, sanitation and nutrition services, while also addressing learning poverty through better foundational education.
Other priorities include bolstering resilience to floods and climate-related disasters, improving food and nutrition security, promoting cleaner energy and better air quality, and enhancing fiscal management to create space for development spending.
Zeeshan Sheikh, IFC Country Manager for Pakistan and Afghanistan, highlighted the importance of private sector participation in these areas, saying, “We are focused on prioritizing investment and advisory interventions that will help crowd-in much needed private investment in sectors critical for Pakistan’s sustainable growth and job creation, including energy and water, agriculture, access to finance, manufacturing and digital infrastructure.”
The framework also includes cross-cutting measures such as expanding social safety nets, advancing financial inclusion and enhancing digital and transport connectivity to protect vulnerable populations, particularly women.
Since commencing operations in Pakistan in 1950, the WBG has provided over $48.3 billion in assistance through IBRD, invested $13 billion via IFC to advance private sector-led growth, and delivered $836 million in guarantees through Multilateral Investment Guarantee Agency (MIGA).
Currently, the WBG’s portfolio in Pakistan includes 106 projects with a total commitment of $17 billion.
Eight Pakistani firms participate in Intersec 2025 business exhibition in Dubai
- The development comes as Pakistan, faced with a prolonged economic crisis, is scrambling to enhance trade with various countries
- Consul-general says the participation of local firms in global exhibitions like Intersec underscores Pakistan’s capabilities in safety sector
ISLAMABAD: Eight Pakistani firms are participating in the Intersec 2025 business exhibition in Dubai, the Pakistani embassy in the United Arab Emirates (UAE) said on Tuesday.
The 26th edition of Intersec, touted as the world’s largest business exhibition for security, safety and fire protection, is being held on Jan. 14 -16 at Dubai World Trade Center.
On Tuesday, Pakistani Consul-General Hussain Muhammad, along with Trade and Investment Counselor Ali Zeb Khan, inaugurated the Pakistan Pavilion at the exhibition.
“Pakistani companies, under the auspices of the Trade Development Authority of Pakistan (TDAP), are participating in event to showcase their products,” the Pakistani embassy said in a statement.
“The Pakistani exhibitors expressed their satisfaction with the event arrangements and emphasized the significance of such platforms in enhancing Pakistan’s export potential to the UAE and other GCC [Gulf Cooperation Council] markets.”
The development comes as Pakistan, faced with a prolonged economic crisis, has been making efforts to enhance trade with various countries in the region as well as to attract foreign investment to revive its $350 billion economy.
Policymakers in Pakistan consider the UAE an optimal export destination due to its geographical proximity, which minimizes transportation and freight costs while facilitating commercial transactions.
The Pakistani consul-general said the participation of Pakistani companies in global exhibitions like Intersec underscores Pakistan’s commitment to fostering trade ties and showcasing its capabilities in the safety sector.
“The event provides an ideal opportunity for Pakistani companies to explore the world market and make business connections,” he added.
Pakistan, Bangladesh commanders underscore enduring partnership for resilience against ‘external influences’
- Pakistan and Bangladesh were once one nation, but split in 1971 as a result of a bloody civil war
- Ties between both nations have warmed up since PM Hasina’s ouster due to an uprising in Aug.
ISLAMABAD: Top Pakistani and Bangladeshi military commanders have stressed the need for an enduring partnership between the two countries to remain “resilient against external influences,” the Pakistani military said on Tuesday, amid a thaw between the two countries since the ouster of Sheikh Hasina.
Pakistan and Bangladesh were once one nation, but they split in 1971 as a result of a bloody civil war, which saw the part previously referred to as East Pakistan seceding to form the independent nation of Bangladesh.
In the years since, Bangladeshi leaders, particularly former prime minister Hasina, chose to maintain close ties with India. Ties between Pakistan and Bangladesh have warmed up since Hasina’s ouster as a result of a student-led uprising in August, witnessing a marked improvement.
Amid the thaw, Lt. Gen. S M Kamr-ul-Hassan, principal staff officer (PSO) of the Armed Forces Division of Bangladesh, met Pakistan Chief of Army Staff (COAS) General Asim Munir in Rawalpindi, according to the Inter-Services Public Relations (ISPR), the Pakistani military’s media wing.
“During their meeting, both held extensive discussions on the evolving security dynamics in the region and explored further avenues for enhancing bilateral military cooperation,” the ISPR said in a statement.
“The COAS and the PSO underscored the importance of a stronger defense relationship, emphasizing that the enduring partnership between the two brotherly nations must remain resilient against external influences.”
On the occasion, the Pakistan army chief reiterated the significance of joint efforts to promote peace and stability in South Asia and the broader region, while ensuring that both nations continue to contribute to regional security through “collaborative defense initiatives,” according to the ISPR.
Lt. Gen. Hassan acknowledged the sacrifices made by Pakistani armed forces in their fight against militancy, noting that their efforts serve as a beacon of “courage and determination.”
Earlier in the day, Pakistan and Bangladesh signed a landmark agreement to establish a joint business council, the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) said, amid efforts to enhance trade and economic cooperation between the two countries.
“The establishment of the Pakistan-Bangladesh Business Council is a milestone for trade relations between the two countries,” FPCCI President Atif Ikram Sheikh said after signing the agreement in Dhaka, along with representatives of the Administrative Federation of the Bangladesh Chamber of Commerce.
During the visit, the FPCCI chief led a Pakistani business delegation that held meetings with their counterparts in Bangladesh to discuss ways to enhance trade ties. The Trade Corporation of Pakistan also signed a memorandum of understanding for rice export to Bangladesh on Tuesday.
Pakistan’s Deputy Prime Minister Ishaq Dar is also scheduled to visit Dhaka in the beginning of February to further consolidate the relations between the two countries.
POLL: Pakistan central bank set to deliver sixth consecutive rate cut to revive economy
- On the inflation side, 56 percent participants of the poll expect inflation to remain below 8 percent this fiscal year
- Pakistan requires ‘considerable efforts, additional measures’ to meet revenue target, central bank says
ISLAMABAD: Pakistan’s central bank is expected to deliver a sixth consecutive policy rate cut this month, a poll found on Tuesday, ahead of a meeting of the bank’s Monetary Policy Committee (MPC) on Jan. 27.
The State Bank of Pakistan cut its key policy rate by 200 basis points to 13 percent on Dec. 16. This was the fifth straight reduction since June as Pakistan keeps up efforts to revive a sluggish economy with inflation easing.
The move made last year’s cuts one of the most aggressive among emerging market central banks in the current easing cycle. Cumulatively, the SBP cut rates by 900 basis points in the last year.
In a poll conducted by Karachi-based Topline Securities, 61 percent of the participants expected that the central bank will announce a rate cut of 100 basis points.
“Participants are expecting rate cut due to high real rates of 950bps in Jan. 2025, compared to historic average of 200-300bps, despite 900bps cut in total interest rates in last five consecutive meetings since Jun 2024,” Topline Securities said on Tuesday.
“We also hold the view that the SBP will announce a rate cut of 100bps, taking total cut to 1000bps. This will be 6th consecutive cut of this cycle.”
In Dec. the MPC assessed that its approach of measured policy rate cuts was keeping inflationary and external account pressures in check, while supporting economic growth on a sustainable basis.
The central bank noted that it expected inflation to average “substantially below” its earlier forecast range of 11.5 percent to 13.5 percent in 2025.
On the inflation side, 56 percent of the participants expected inflation to remain below 8 percent this fiscal year (July 2024-June 2025), according to Topline Securities.
The South Asian country is navigating a challenging economic recovery path and has been buttressed by a $7 billion facility from the International Monetary Fund (IMF) in September.
The central bank has said that “considerable efforts and additional measures” will be required for Pakistan to meet its annual revenue target, a key focus of the IMF agreement.
Historic Islamic alliance pledges to improve access to education for girls
- The Islamabad Declaration for Girls’ Education affirms girls’ education as both a religious obligation and societal necessity
- The summit in Pakistan capital brought together diverse range of religious schools as well as activists like Malala Yousafzai
ISLAMABAD: Islamic religious, political and civil leaders have united in a historic campaign to improve access to education for girls and women.
The Islamabad Declaration for Girls’ Education affirms girls’ education as both a religious obligation and societal necessity.
It brings together a diverse range of religious schools of law including Deobandi, Hanafi and Haqqani schools, as well as gender activists like Nobel Laureate Malala Yousafzai and political and civil society leaders.
The declaration was signed during a conference in the Pakistani capital, Islamabad, convened by Saudi Arabia’s Dr. Mohammed bin Abdulkarim Al-Issa, secretary-general of the Muslim World League and chairman of the Organization of Muslim Scholars.
“I am imagining this conference as a beginning of a new journey, where we commit to a future for every girl to have access to complete quality education,” Yousafzai said in a statement.
“I want to thank the Muslim World League. Your Excellency Al-Issa; you have brought us together to address the barriers holding girls back from their right to go to school.”
Al-Issa added that the gathering “will not merely be a ‘call,’ a ‘declaration,’ or simply a ‘statement of stance.’
“Rather, it will represent a qualitative transformation in supporting girls’ education — a change that will bring joy to every deprived girl,” he said.
Religious leaders who affirmed the declaration include senior figures from the Deobandi school in Pakistan and India, leading Hanafi jurists, and the presidency of Darul Uloom Haqqania, Sheikh Anwarul Haq Haqqani.
Others included the Grand Mufti of Pakistan Sheikh Muhammad Taqi Usmani; the Mufti of Egypt Sheikh Dr. Nazir Mohammad Ayad; the Amir of Jamiat Ulema-e-Islam (Pakistan) Sheikh Fazl-ul-Rahman bin Mufti Mahmood; the President of Ulema Council of Pakistan Sheikh Tahir Mahmoud Ashrafi; and the President of Jamiat Ulama-e-Hind (India) Sheikh Syed Arshad Madani.
“This gathering brings together the intellectual capital of the Muslim world not just to appreciate the enormity of the challenge we face, but also as a declaration of our resolve to overcome all these impediments,” said Pakistani Prime Minister Shehbaz Sharif.
In addition, the Muslim World League and Organization of Islamic Cooperation agreed on a number of practical measures to improve access to education.
One of these measures is an awareness campaign by a number of educational centers and scholars.
Another is a new Islamic Educational Alliance drawing on a diverse and influential network of religious leaders, intellectuals, policy experts and academics from leading Islamic universities worldwide
The Muslim World League will also partner with a number of international organizations including the UN Refugee Agency and UN University for Peace to further the cause of providing access to education for women.
The summit brought together more than 150 dignitaries from 44 Muslim and other friendly states, according to Pakistan’s Foreign Office.
