At NEC meeting, PM hails provinces' cooperation in addressing economic challenges

• Ensuring defence funding remains priority: PM.
• NEC okays Rs3.66tr development budget: minister.
• Inflation target set at 8.2% for next fiscal year.
  

Prime Minister Shehbaz Sharif on Wednesday lauded the cooperation extended by provinces in addressing major economic challenges, saying macroeconomic stability was achieved through combined efforts.

Addressing the National Economic Council (NEC) meeting, the prime minister said that the federal government had taken decisions in Pakistan's best interest through teamwork, adding that the economy faced major challenges but achieved macroeconomic stability.

"We made decisions in the best interest of Pakistan as a team," he told the meeting.

Highlighting the challenges to Pakistan's economic stability, PM Shehbaz said that the regional situation had caused oil prices to rise sharply, with the government providing Rs128 billion in relief to the public in fuel prices.

The prime minister recalled that queues were seen at petrol stations in several countries around the world, but timely measures ensured fuel remained available to consumers in Pakistan.

The prime minister acknowledged the "full cooperation" extended by provincial governments in addressing economic challenges, saying the federal government was in consultations with provinces for several weeks for the upcoming budget.

The premier said that discussions had also focused on generating additional resources, stressing that maximising resources remained a key government priority.

PM Shehbaz said that the government had tried to remain committed to the International Monetary Fund (IMF) programme despite various challenges.

"We tried to meet the expectations of the people," he said, adding that the achievements were made possible through collective teamwork.

The prime minister affirmed that ensuring resources for defence in the upcoming budget was a priority, adding that additional funding was required to tackle the challenge of terrorism.

NEC okays Rs3.6tr development budget

Briefing the meeting on budget proposals and overall macroeconomic indicators, Federal Minister for Planning Ahsan Iqbal said the NEC had approved a Rs3.66 trillion national development budget and set a 4% GDP growth target for the next fiscal year.

The federal development allocation has been set at Rs1 trillion, provincial development spending at Rs2.21 trillion and Rs451 billion for federal enterprises, Iqbal told the meeting.

The council also approved the planning ministry's proposal that NEC meetings should be held on a quarterly basis.

The minister said that the Public Sector Development Programme (PSDP) had declined from 2.6% of GDP in 2018 to 0.6%, stressing that Pakistan required a "development emergency" to accelerate economic growth.

Iqbal noted that 74% of government revenue was being consumed by debt servicing, while Pakistan's biggest economic challenge remained the external sector.

"We will have to increase foreign investment and exports," he said.

According to Iqbal, the agriculture sector growth target has been fixed at 3.6%, the industrial sector at 4.5% and the services sector at 4.2%.

He added that the inflation target had been set at 8.2%, while water security had been identified as Pakistan's foremost priority.

The minister reiterated that under the Rs1 trillion federal PSDP, no new projects would be initiated except those related to education and defence.