World Pakistan sets ambitious growth target with $54 billion budget
Steam rises as India and Pakistan take basmati battle to EU
From biryani to pilau, Pakistan and India's shared culinary landscape is defined by basmati, a distinctive long-grain rice now at the centre of the latest tussle between the bitter rivals. India has applied for an exclusive trademark that would grant it sole ownership of the basmati title in the European Union, setting off a dispute that could deal a major blow to Pakistan's position in a vital export market. "It's like dropping an atomic bomb on us," said Ghulam Murtaza, co-owner of Al-Barkat Rice Mills just south of Lahore, Pakistan's second-largest city.
Pakistan announced a budget Friday of 8.4 trillion rupees ($54 billion) for the next fiscal year, basing it on an ambitious growth target of 4.5 percent and tripling spending on public sector development with an election just two years away.
Finance Minister Shaukat Tarin's presentation to the National Assembly drew jeers from opposition lawmakers, who thumped their desks and chanted "Imran Khan is a thief", a reference to the Prime Minister.
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Justifying a big-spending budget, Scott Morrison told Parliament that coronavirus had "raged through the developed world and is now raging through the developing world". But is it "30 times" more economically severe than the global financial crisis?The Government's response has been to stimulate recovery by committing to an unprecedented level of spending, which, it says, is justified by the severity of the recession.
Khan has presented himself as a champion of the poor and pledged to lift the country out of poverty, but Pakistan is heavily indebted and desperate for foreign investment.
Rising inflation has left many struggling with higher food prices and energy bills.
Tarin said the budget earmarked some 3 trillion rupees to retire or service current debt.
"We were on the verge of default because of past governments' bad governance but now we have overcome that crisis," Tarin said.
The budget earmarks 2.135 trillion rupees on public development, including job-creating infrastructure projects -- a huge increase from this year's 1.532 billion.
"The weaker segment of society has been yearning for prosperity for many years and now sustainable growth is needed," Tarin told legislators, saying the budget would be nearly four billion rupees in deficit.
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Pakistan's intelligence service accused of kidnap and torture in crackdown on dissenting voices.A few seconds later, a group of men grabbed him and forced him into the backseat of a waiting car.
"We expect trickle-down effects with our budgetary measures," he said.
Spending on the military -- which has swallowed a huge chunk of Pakistan's riches since the country came into being with the partition of India in 1947 -- will rise six percent to 1.4 trillion rupees.
Tarin said Pakistan's current account was in surplus for the first time in years on the back of unprecedented remittances and rising exports.
To fund the budget, the government has set a tax revenue collection target of nearly six trillion rupees, compared with 4.5 trillion this year.
The finance minister said some 140 billion rupees had been set aside to vaccinate the 220 million-strong population against Covid-19.
Mohammad Sohail, financial manager and CEO of Topline Securities, said the budget was a "confidence-building exercise".
"The biggest challenge will be to deal with IMF (International Monetary Fund) and rising commodity prices," he said.
Independent economist Shahid Hasan Siddiqui was more dismissive.
"This whole budget is based on erroneous figures and false hopes," he said.
"This budget will further distance the country from economic autonomy."
Reserve Bank signals it’s time to start getting back to normal .
The RBA has hinted that July will see the start of a normalisation of monetary policy. But there'll still be no interest rate rises for years.The July board meeting will decide if the target month for bond purchases to maintain the current 0.10% rate of April 2024 should be maintained or whether the three-year bond maturing in November of the same year should become the target. April would indicate the RBA still believes that unemployment will fall sufficiently by then to boost wages and lift inflation “sustainably” into the 2%-3% target range.