If mini-budget approved, 2022 will be the worst year of inflation: Shehbaz Sharif

Pakistan Muslim League-Nawaz (PML-N) President Shehbaz Sharif has said that if the mini-budget is approved, then the new year will be the worst year of inflation for Pakistan.

"Mini-budget will make the situation worse instead of making it better," the official PML-N Twitter handle quoted the party president as saying.

Sharif's statements come ahead as the government is set to present the mini-budget. In a statement, Finance Minister Shaukat Tarin said that the government would withdraw tax exemptions worth Rs350 billion.

Govt to bring ‘mini-budget’ in coming days: Shaukat Tarin

Meanwhile, Sharif said that the mini-budget is an attack on the sovereignty of Parliament, and if it does not stand for the interests of the people then it will not be considered as a representative body of the people.

The PML-N president further said that the government should not imprison the people in the cage of the International Monetary Fund (IMF).

Pakistan's economy has come under increasing pressure in recent months with the rupee hitting its all-time low on multiple occasions. A widening current account deficit, higher import bill, and faster pace of inflation have put policymakers at unease.

Meanwhile, the Ministry of Finance in its monthly economic outlook for December 2021 said that Pakistan is on a higher growth trajectory, compared to growth observed in fiscal year 2021.

Inflation won’t subside anytime soon

However, there is inflationary pressure due to low base effects and surge in global commodity prices; both international food and oil prices are currently quoted at or near the upper regions of the present international commodity price cycles, and drop is expected in the coming months.

The exports of goods and services settled well above the US$3 billion and are expected to increase further in the coming months to reach a new higher level for the foreseeable future, whereas, the government’s fiscal consolidation efforts are paying off in terms of improved fiscal accounts and with revenue mobilisation strategy, overall fiscal deficit is expected to remain within the reasonable level.