Pakistan unveils $50 billion budget

Pakistan’s cash-strapped government on Friday unveiled a budget of 14.5 trillion rupees (about $50.5 billion), more than half of which was earmarked for servicing 7.3 trillion rupees in debt.

Pakistan’s economy is experiencing a balance-of-payments crisis, as it tries to pay off its massive external debt service, after months of political chaos have alienated any potential foreign investment.

Inflation has risen, the rupee has fallen, and the country can no longer afford to pay for its imports, causing a sharp decline in industrial production.

Some 950 billion rupees have been allocated for development projects ahead of the general election scheduled for later this year, while other populist measures include an increase in government employees’ salaries by up to 35 percent, and a 17.5 percent increase in state pensions.

The Minister of Finance, Yitzhak Dar, who presented the budget to the National Assembly, said on Friday that the goals had been set carefully.

Prime Minister Shahbaz Sharif blamed his predecessor Imran Khan, who was ousted in a no-confidence vote in April 2022, saying “our previous government has destroyed the economy.”