[vc_row][vc_column][vc_column_text dp_text_size=”size-4″]Policy-level discussions between Pakistan and the International Monetary Fund (IMF) have started, concentrating on essential economic reforms to reduce unnecessary expenditures and secure a new loan program.
Finance Minister Muhammad Aurangzeb leads the Pakistani economic team, which presented a detailed plan to the IMF team, headed by Nathan Porter, aiming to cut expenses by about Rs300 billion in the next fiscal year.
The proposed reforms include a ban on new recruitment for grades 1 to 16, no allocation of development funds for parliamentarians, and the introduction of a partnership-based pension scheme. The government also plans to stop funding ongoing provincial development projects and refrain from establishing new universities, expecting provinces to independently finance their educational institutions.
Read more: IMF Directs Pakistan to Raise Property Purchase Taxes
Pension reforms, requested by the IMF, are also on the agenda. A new partnership pension scheme is proposed for all new recruits, excluding defense and police personnel.
Ministry of Finance officials highlighted the rising pension bill, projecting it to reach Rs960 billion in the next fiscal year, up from Rs801 billion this year.
The negotiations, expected to last until May 23, will determine the new loan program’s volume, terms and conditions, budget targets, tax and non-tax revenue, and macroeconomic targets for the fiscal year in consultation with the IMF.
There is also a possibility of a total ban on development funds for members of parliament next year, for which Rs90 billion was allocated this year.
However, the IMF has not yet confirmed a potential staff-level agreement at the end of the negotiations, which could pave the way for such an agreement between the parties.[/vc_column_text][/vc_column][/vc_row]
