Finance minister Shaukat Tarin said on Wednesday, Pakistan will exceed the revenue target set in the annual budget for the current financial year. Tarin claimed revenue would hit 6.1 trillion Pakistani rupees ($34.2 billion), compared to a target of 5.8 trillion rupees.
“Despite that I gave the target of 5.8 trillion, I’m going to hit at 6.1 trillion, and I’m tracking,” he told a news conference in Islamabad.
He said a recent fuel and electricity subsidy package announced by Prime Minister Imran Khan would be partially financed by the extra revenue, which may cause the fiscal deficit to slightly rise or fall.
“If due to that the deficit may go a bit 0.5 percent up or down, that may be,” he said.
Prime Minister Imran Khan announced a cut in petrol and electricity prices on Monday despite a steep rise in the global oil market, pledging to freeze the new rates until the next budget in June.
The subsidy will cost around $1.5 billion, a big number for Pakistan to defend during the International Monetary Fund (IMF) 7th review, which already has started, of a $6 billion rescue package agreed in 2019.
The south Asian country had to undertake fiscal tightening measures to pass its last IMF review, which was delayed by months as the government struggled to complete prior action required by the lender to release $1 billion in February.
The finance ministry has said that Pakistan was confident it will be able to defend its subsidy package during the IMF review, which Tarin also reiterated.
“We are doing it with our own revenues, which has improved. We have a space for that,” he said. “So, IMF shouldn’t have any objections on this.”
