Govt flags risks to budgetary targets
The government has flagged a series of critical risks to next year’s budget and medium-term outlook, including slower than targeted GDP growth, inflation shocks, exchange rate volatility, lower revenue buoyancy, debt servicing costs, poor performance of state-owned entities (SOEs) and unexpected climatic and other natural disasters. In a written statement on fiscal risks placed before parliament, Finance Minister Muhammad Aurangzeb and Finance Secretary Imdadullah Bosal divided these risks into seven categories — macroeconomic, revenue, debt, SOEs, climate change, natural disasters, and other contingent liabilities — and quantified their possible impact on fiscal deficit. They suggested mitigation measures in case one or more of these risks materialise during 2025-26. According to the statement, the macroeconomic risks arise from slower-than-expected GDP growth, inflation shocks, and exchange rate volatility.