The International Monetary Fund (IMF) has critically responded to Pakistan’s recently approved budget, deeming the measures insufficient and urging the government to undertake additional actions to stabilize the economy. Sources reveal that the IMF is pressing for an increase in electricity and gas rates starting from July 1st.
The IMF has demanded that the National Electric Power Regulatory Authority’s (NEPRA) decision to hike electricity rates be implemented immediately. Additionally, it insists on raising gas prices in the new fiscal year to control subsidies effectively. These steps are seen as prerequisites for a new loan program.
An IMF delegation is expected to visit Pakistan in the second week of July. However, their visit, initially planned for the last week of June, has been postponed. Despite the criticism, the IMF has acknowledged the stringent economic measures included in the budget, praising them as essential for the country’s economic health. The decision to eliminate tax exemptions and concessions has also received commendation from the global financial institution.
While the government has taken steps toward fiscal discipline, the IMF’s call for “do more” signifies that more robust reforms are necessary to secure financial stability and meet the IMF’s conditions for continued support. This includes implementing further austerity measures and addressing structural issues within the energy sector.
