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As a stepping stone for the IMF program, the tough and unpopular budget: Abdul Rahman

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After meeting all of the criteria set out by the lender in its annual budget, Pakistan is aiming to secure a staff-level agreement on an IMF rescue of over $6 billion this month, according to Reuters, who spoke with the country’s junior finance minister.

In an effort to secure a loan from the International Monetary Fund (IMF) and prevent another economic collapse, the South Asian nation has set ambitious revenue objectives in its yearly budget, despite growing domestic unrest over new taxing policies.

Minister of State for Finance, Revenue and Power Ali Pervaiz Malik stated on Wednesday that the goal is to reach an agreement at the staff level before the IMF board takes a break, adding that they want to conclude the process within the next three to four weeks.

Regarding the package’s size, he stated, “I think it will be north of $6 billion,” though he stressed that the main focus right now was on the IMF’s accreditation.

With a fiscal deficit that dropped sharply to 5.9 percent of GDP from 7.4 percent the year before, Pakistan aimed for tax collection of 13 trillion rupees ($47 billion) for the fiscal year that started on July 1, a near-40 percent increase from the next year.

The goal of implementing a harsh and unpopular budget, according to Malik, was to pave the way for an IMF program, and the lender was pleased with the revenue measures implemented after their discussions.

Consumers hit hard by food export surge, trade imbalance in Pakistan falls 12.3 percent

“There are no major issues left to address, now that all major prior actions have been met, the budget being one of them,” added Malik.

The budget might get the go light from the IMF, but experts say it might make the public even more furious.

“Obviously they (budget reforms) are burdensome for the local economy but the IMF programme is all about stabilisation,” Malik pointed out.

Given Pakistan’s impending debt repayments and the aftermath of the unwinding of capital and import restrictions, economist Sakib Sherani of private firm Macro Economic Insights warned that the country’s currency and foreign exchange reserves would be under pressure unless the IMF and Pakistan reached a swift agreement.

“If it takes longer, then the central bank may be forced to temporarily re-instate import and capital controls,” he added. “There will be a period of uncertainty, and one casualty is likely to be the rally in equities.”

The benchmark share index of Pakistan climbed 1% during trading on Wednesday, hitting an intraday high of 80,348 points at 0640 GMT, a new record.

With persistent hope for a rescue package from the International Monetary Fund to support the faltering economy, the index has risen by about 10% since the budget was unveiled on June 12.

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Islamic Sukuk Bonds: Government Is Expected To Begin Bond Auction Next Week

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There is now more positive economic news for the people of Pakistan. The government is anticipated to begin the Sukuk Islamic Bond auction next week, after the central bank’s announcement of a large drop in the policy rate.

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SIFC Encourages Green Tourism: Reforming Visas to Increase Investment

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Enhancing investment in the tourism sector, Green Tourism Pakistan’s initiative has received backing from the Special Investment Facilitation Council.

Visa-On-Arrival for 126 countries, Visa-Free Entry for Gulf Cooperation Council nations, and 24-hour expedited visa processing are some of the main features of the Green Tourism Visa Policy.

It is anticipated that these endeavors will draw in about 80 million dollars in foreign direct investment and 8.3 billion rupees in domestic investment.

Green Tourism Private Limited has introduced hunting resorts in Naltar, Hunza, and Skardu, along with four- and five-star city hotels, to improve the tourism experience.

In the first phase of the project, 17 of the 78 areas have seen the start of development activity.

Approved is a central authority for Green Tourism that will supervise the growth of Air Operations.

To promote Religious Tourism, extra precautions have been taken to guarantee the security of visitors from all religions, including Sikhs and Buddhists.

Furthermore, in order to improve the quality of the tourist experience, the green guide quality program has been introduced to supply top-notch tour guides.

There is now a deluxe bus excursion from Islamabad to Peshawar that promotes local culture.

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July 2024 export data from Pakistan shows a significant rise.

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The Strategic Investment Facilitation Council (SIFC) has been instrumental in improving Pakistani products’ access to international markets, as seen by the significant surge in exports from the country at the start of the 2024–25 fiscal year.

With a 7.26% rise over the same month the previous year, July 2024 exports to the US were $476.017 million. After increasing by 7.74% annually, the United Arab Emirates emerged as the second-largest export destination.

The third and fourth places were occupied by exports to the UK ($183.303 million) and China ($60.100 million). A substantial increase in exports to Afghanistan was recorded in July of this year, rising from $46.262 million to $88.065 million, largely due to successful anti-smuggling efforts.

With a combined export volume of $553.951 million, more important export destinations included Germany, the Netherlands, Italy, Spain, Saudi Arabia, and Turkey.

A bright future for the national economy is suggested by the growing confidence major international markets have in Pakistani exports. Through the efforts of SIFC and the government, this greater access to global markets has been made possible.

Pakistan’s economy is predicted to remain stable as a result of the export growth that SIFC has enabled.

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