Moving towards growth mode, Pakistan to spend $6bn on development

In a bid to spurt Pakistan's economy, the government plans to earmark Rs 900 billion or $6bn for development expenditure in the upcoming budget, informed Finance Minister Shaukat Tarin.

Talking to Bloomberg, Tarin who took office last month says that the country’s economy need to grow by 5 percent next year.

“That’s the bare minimum we need for a country this size,” said Tarin, who will be presenting a new budget in June. “There are almost 110 million youth.”

Tarin, who was appointed as the fourth finance minister in the present PTI government wants to reverse the decisions taken by his predecessor to lower spending to narrow the budget deficit, which he estimates to be a little above 7pc of gross domestic product in the current fiscal year through June, against 8.1% in the previous year. Tarin said he expects the deficit in the next fiscal to be 1 or 1.5 percentage points lower.

Tarin informed that the government’s GDP target for next year of 5pc is a percentage point higher than the IMF’s 4pc projection. “We need 2 million jobs every year,” he said. “If we do not go into growth mode, we will have a major crisis on the streets.”

“First we have to get more revenues,” says Tarin, who is targeting tax revenue of about Rs 6 trillion next year, as compared to current year target of Rs 4.75 trillion. “Unless we get more revenues, forget about any incentives to boost the economy.”