The International Monetary Fund (IMF) is advocating for stringent austerity measures in Pakistan’s development budget for the current fiscal year, according to a report by ARY News on Friday. The IMF has expressed worries about fund allocation for new ventures and has urged the country’s interim government to prioritize the completion of ongoing projects over the initiation of new ones.
The IMF’s stance could lead Pakistani authorities to suspend funding for new projects and reevaluate their development objectives. The institution has, however, supported the allocation of funds for the restoration of districts affected by flooding.
In a virtual meeting with Pakistani finance officials held on Friday, the IMF also demanded an immediate doubling of gas tariffs to offset losses in the gas sector and circular debt in Pakistan. The organization warned that failure to implement the tariff increase would violate the Standby Agreement and proposed that gas companies recover Rs 46 billion ($270 million) for losses experienced between July and September.
The Economic Coordination Committee (ECC) is set to consider this proposed gas rate increase in its upcoming meeting. Finance Minister Dr Shamshad Akhtar, who heads the caretaker government, will likely be at the forefront of these deliberations.
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