ISLAMABAD: All the pre-budget meetings have been rescheduled by at least a week amid delays in compilation of key economic output data for the current year and prevailing challenging political situation in the country.

The date for the announcement of the federal budget on June 9 has remained unchanged so far, according to official sources, who attributed the delays to the ongoing arrival of production data of key components of the gross domestic product (GDP) and its cascading impact on the scheduling of other high profile meetings of the federal and provincial governments.

As a result, the meeting of the National Accounts Committee (NAC) has now been called on Monday (May 22) to finalise the size of the GDP and its growth rate for current fiscal year (FY2022-23) and revised estimates for the last fiscal year (FY2021-22) from previous schedule of May 18 that was first changed to May 19.

The sources said that the output data for April underwent significant changes compared to previous months, particularly in the energy and petroleum sectors. Additionally, the final estimates for wheat production were still being finalised due to substantial losses caused by hailstorms and rains during the last stage of the harvest in some parts of Punjab and Khyber Pakhtunkhwa. Consequently, the earlier projected GDP growth rate of 0.5pc may actually result in a negative figure.

Due to the impact of the national accounts, all other budget-related events have experienced delays. The approval of the budget strategy paper (BSP) by the federal cabinet, which was originally planned for the week ending May 19, has now been rescheduled for the following week. The BSP plays a crucial role in determining the overall direction of the budget for the upcoming year based on the performance of the national economy in the current year.

Similarly, the meeting of the Annual Plan Coordination Committee (APCC) to finalise next year’s development budget for the federal and provincial governments has also been delayed to June 2 instead of its previous schedule of May 23. The APCC, led by the federal planning minister and provincial development ministers, also has to clear the next year’s growth estimates.

As a result, the ministry of planning and development has requested the prime minister office to schedule a meeting of the National Economic Council (NEC) between June 3 and 6 to ensure the announcement of the federal budget on June 9. The NEC, led by the prime minister and comprising provincial chief ministers and heads of the regional governments — AJK and GB, has to give final approval for the next year’s development budget and growth estimates.

The PM office has been informed that if the NEC meeting takes place after June 6, it would result in a one-week delay for the federal budget. This is because the approved data from the NEC is required to be printed before the budget, and the economic survey needs to be released at least one day prior to the federal budget.

Under the Public Finance Management Act 2019, the government is required to get the Budget Strategy Paper (BSP) for the next fiscal year approved by the federal cabinet by April 15, but this had been delayed due to prevailing uncertain situation caused by political disturbances.

Published in Dawn, May 20th, 2023