Daily Times

The Ministry of Finance has forecast that inflation is likely to reach 38% and increase further in the coming months. In its Monthly Economic Update and Outlook Report, the Finance Ministry reported record inflation, government expenditure and fiscal deficit.

The country’s economy is faced with sky-high inflation and slow economic activity. The ministry’s report recorded the inflation rate in March at 35.4%, while the average inflation rate from July 2022 to March 2023 was 27.3%.

The report noted that there was a decrease in remittances, exports and investments in the nine months of the ongoing fiscal year.

Remittances from July 2022 to March 2023 saw a decrease of 10.8% to $20.5 billion, the report said.

During the same period, exports fell 11% to $21.1 billion, and the fiscal deficit increased to Rs2.4 trillion.

During the same period last year, the fiscal deficit was Rs2.27 trillion.

The report also suggested that there may be an improvement in the value of the rupee as well as an increase in external funding due to the revival of the IMF program. Annual development expenditure from July 2022 to March 2023 decreased by 31% to Rs287 billion. Foreign investments saw a huge dip of 98%. In the current fiscal year from July-March, the foreign exchange reserves depleted to $10 billion. The figure was $16.57 billion during the same period last fiscal year, the report stated.

So far this financial year, the volume of imports decreased by 21% to $41.5 billion. The power distribution companies will collect the tax from the shopkeepers on electricity bills. The FBR has started work for collecting tax from shopkeepers and service providers with an annual income of over Rs1 billion.

The IMF had demanded bringing two million shopkeepers in the tax net. The shopkeepers tapped through the special scheme will be included in the active taxpayer list.