Pakistan's Crucial Fiscal Maneuver: Balancing Growth and Defense

Pakistan is poised to unveil its federal budget for the upcoming fiscal year, a financial plan crucial for fostering economic growth and accommodating an expected rise in defense expenditure after last month's conflict with India.

In presenting a budget of 17.6 trillion rupees, a 6.7% decrease from the current fiscal year, the government aims to keep the fiscal deficit at 4.8% of GDP. This comes while remaining within the confines of an IMF program and navigating new trade tariffs from the United States.

With India increasing its defense budget significantly, Pakistan allocates more funds towards defense, offset by cuts elsewhere. However, economists warn that interest rate cuts may not suffice in stimulating growth amidst fiscal restraints and necessary IMF-backed reforms.

(With inputs from agencies.)