In this photo released by the Pakistan Finance Ministry Press...

In this photo released by the Pakistan Finance Ministry Press Service, Pakistan's Finance Minister Muhammad Aurangzeb speaks and parented, the Federal Budget before the National Assembly of Pakistan, in Islamabad, Pakistan, Wednesday, June. 12, 2024. Pakistan's new gov't presents its first budget in Parliament as it seeks new long-term IMF bailout. Credit: AP

ISLAMABAD — Pakistan’s new coalition government presented its first budget in parliament on Wednesday, promising an increase of up to 25% in the salaries of government employees and setting an ambitious tax collection target while talks with the International Monetary Fund about a new bailout continue.

Analysts say the new budget of about $68 billion — up from $50 billion last fiscal year — is aimed at qualifying for a long-term loan of $6 billion to $8 billion from the IMF to help stabilize the economy, which in 2023 nearly defaulted on the payment of foreign debts.

Pakistan’s fiscal year begins on July 1. Finance Minister Muhammad Aurangzeb said the government of Prime Minister Shehbaz Sharif wants to achieve 3.6% economic growth.

Aurangzeb also said inflation in Pakistan is down to 12%. At one point last year, it went above 40%, sparking angry protests.

"Now we are moving towards the right direction,” Aurangzeb said.

The minister announced that Pakistan is setting a challenging target of collecting 13 trillion rupees ($44 billion) in taxes, which is 40% more than in the current fiscal year. He said the government will ensure that the number of taxpayers increases.

Currently, about 5 million of Pakistan's 240 million people pay taxes.

People shop at a market in Lahore, Pakistan, Wednesday, June....

People shop at a market in Lahore, Pakistan, Wednesday, June. 12, 2024. Pakistan's new government presents its first budget today in Parliament as it seeks new long-term IMF bailout. Credit: AP/K.M. Chaudary

On the IMF talks, Aurangzeb said Pakistan will privatize the country's national carrier. Pakistan International Airlines has had losses and has deteriorated over the decades as governments doled out patronage by giving airline jobs to supporters.

Aurangzeb also said the government will encourage the private sector to manufacture solar panels and other equipment in Pakistan, where tens of thousands of people have already installed Chinese-made solar system at homes, shops, schools, hospitals and factories because of increasing electricity rates.

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