ISLAMABAD: Fresh demands have emerged during the ongoing negotiations between the International Monetary Fund (IMF) and the Government of Pakistan, with the Fund calling for strict adherence to all agreed conditions in the upcoming federal and provincial budgets. According to sources close to the discussions, the IMF is pushing for comprehensive fiscal discipline across all tiers of government.
One of the key conditions is a written guarantee from provincial governments to undertake significant expenditure cuts. The IMF has also demanded that provinces ensure business-friendly reforms are incorporated into their budgetary frameworks. In addition, the Fund has explicitly called for the elimination of subsidies on electricity and gas and recommended imposing a freeze on new public sector employment through rightsizing initiatives.
The IMF further insists that political consensus be developed in Parliament to secure the agreed economic targets. This would involve engaging all major political parties and ensuring their support for key budgetary actions. Provinces have been urged to enforce fiscal measures to meet those targets.
To curb systemic issues, the IMF has also stressed the need for coordinated federal and provincial action to combat power and gas theft, as well as smuggling. Furthermore, it has recommended that provincial governments formalize plans to tax agricultural income and service sectors—proposals that are to be incorporated into the forthcoming budget.
These evolving conditions indicate that the next budget will likely feature significant structural reforms aimed at addressing fiscal imbalances and enhancing revenue mobilization amid Pakistan’s ongoing economic stabilization efforts.
