Pakistan unveils 2022/23 budget, aims for 5% growth

(Corrects federal expenditure determine to 9.5 trillion rupees from 9.5 billion rupees)

By Manoj Kumar

(Reuters) – Pakistan Finance Minister Miftah Ismail on Friday unveiled the finances for the 2022/23 fiscal yr beginning July, aiming for financial development of 5% amid strain to manage the fiscal deficit and safe Worldwide Financial Fund bailout cash.

These are the highlights from the 2022/23 finances:

GDP/DEFICIT

* Targets 5% financial development for 2022/23 fiscal yr, beginning July, after an estimated annual development of 5.97% for the present fiscal yr

* Fiscal deficit goal set at 4.9% of GDP for 2022/23 vs revised goal of seven.1% in 2021/22

* Tax to GDP ratio set at 9.2% for 2022/23 vs 9% in 2021/22

RISKS TO ECONOMY

* Battle between Russia and Ukraine poses a danger to Pakistan’s financial system

* Larger crude oil, meals costs may stoke excessive inflation

* Financial tightening and financial consolidation could decelerate financial development

EXPENDITURE

* Federal expenditure estimated at 9.5 trillion rupees for 2022/23

* Improvement expenditure set at 800 billion rupees for 2022/23

* Pakistan to spend 699 billion rupees on focused subsidies in 2022/23

* Defence expenditure set at 1.52 trillion rupees for 2022/23 vs 1.48 trillion rupees in 2021/22

* Finances allocates 90.55 bln rupees for training in 2022/23 vs 90.86 bln in 2021/22

* Pakistan cuts well being finances to 19.03 bln rupees for 2022/23 vs 154.49 bln rupees in 2021/22

REVENUE

* Income goal set at 7 trillion rupees for 2022/23

* Goals to boost 96.41 billion rupees from privatisation in 2022/23

* To impose 2% extra tax on earnings taxpayers with 30 million rupees annual earnings

* Expects 300 bln rupees receipts from central financial institution in 2022/23 vs 474 bln rupees in 2021/22

INFLATION

* Finances forecasts common inflation of 11.5% in 2022/23 vs 11.7% in 2021/22

* Shopper-price-index based mostly inflation rose in Could to 13.8% year-on-year, the best in two-and-half years.

* Pakistan raised petrol and diesel costs by round 20% earlier this month

INTERNATIONAL TRADE

* Pakistan’s export goal set at $35 billion for 2022/23

* Import goal set at $70 billion for 2022/23

* Commerce deficit goal set at 2.2% of GDP in 2022/23

* Finances forecasts remittances of $33.2 billion in 2022/23

AUSTERITY MEASURES

* Ban on shopping for new vehicles for govt officers

* Goals cuts in gasoline consumption by govt officers

* Funds for debt servicing estimated at 3.9 trillion rupees in 2022/23

OTHER INITIATIVES

* To lift tax exemption restrict for salaried earnings taxpayers

* Proclaims to advertise particular financial zones to spice up manufacturing

* Presents 5-year tax vacation for movie manufacturing trade

* To arrange 250 mini-stadiums to advertise sports activities

* To exempt import of photo voltaic panels from tax

* Exempts 30 pharmaceutical merchandise from customs responsibility

* Proposes 15% hike in govt staff’ salaries

($1 = 202.00 Pakistani rupees)

(This story corrects federal expenditure determine to 9.5 trillion rupees from 9.5 billion rupees)

(Compiled by Manoj Kumar; enhancing by Mayank Bhardwaj)