The Finance Ministry has cautioned that delay in rains and early heat waves are expected to adversely impact wheat production.
According to the monthly Economic Update and Outlook for March 2023 issued by the Finance Ministry, wheat production largely depends on the prevailing climatic conditions. As witnessed last year, delay in rains and early heat waves are expected to adversely impact wheat production.
According to the Pakistan Met Office the country might witness different spells of heat waves within upcoming months of April and May, 2023.
The document also states that presently the government is pursuing fiscal consolidation in order to reduce the overall fiscal deficit through a combination of expenditure management and revenue increase. These measures are paying off in the form of improved fiscal accounts.
The fiscal deficit has been reduced to 2.3 percent of GDP during Jul-Jan FY2023, down from 2.8 percent of GDP in the same period previous year, while the primary balance is in surplus due to significant decline in non-markup expenditures.
On the revenue side, FBR tax collection is currently growing at 18 percent despite unprecedented challenges due to slowdown in economic activity and import compression. However, the current performance indicates the resolve of the government to optimize the revenue collection and to achieve the full year target.
According to the report, the economy is showing continuous signs of resilience as depicted through contained fiscal and current account deficit during the current fiscal year despite challenges and uncertainties.
Furthermore, Pakistan is currently confronted with a shortage in external liquidity. Through demand management policies, the government is trying to limit the current account deficit, which will not transfer further pressure on dwindling reserves. Moreover, the government is firmly inclined to successfully complete the IMF’s EFF program, which includes necessary policy measures and will bring additional relief to the financial account of the balance of payments.
The policy measures are intended to bring expenditures more in line with the income generated within the country. At the fiscal front, the government is pursuing fiscal consolidation in order to reduce the overall fiscal deficit through expenditure management, austerity measures, and revenue mobilization.
