IMF asks Pakistan to further ‘increase’ gas, electricity prices

The International Monetary Fund (IMF) has reportedly expressed dissatisfaction with Pakistan’s recently approved federal budget 2024-25, citing the need for further actions to address the country’s economic woes.

According to sources familiar with the development, the IMF has demanded Islamabad to further increase electricity and gas prices starting from July 1.

The National Assembly recently passed the Federal Budget for the fiscal year 2024-25, with a total allocation of Rs18,870 billion.

While the IMF has praised the government’s challenging economic decisions in the budget, including the reduction of tax exemptions and subsidies, it has insisted on the elimination of these measures, describing them as “essential” for the countrys economic recovery.

The IMF’s demands come as no surprise, given the country’s struggling economy. Pakistan has been grappling with high inflation, a large trade deficit, and dwindling foreign exchange reserves. The government has been working to address these issues, but the IMF’s demands suggest that more needs to be done.

Additionally, the scheduled visit of the IMF delegation to Pakistan in the last week of June has been postponed, with the team now expected to visit in the second week of July.

The federal budget for the fiscal year 2024-25 has a total outlay of Rs. 18.877 trillion, with a focus on addressing various economic and social challenges.

‘IMF budget’

Earlier, Prime Minister Shehbaz Sharif mentioned that the government had to consider the International Monetary Fund’s (IMF) recommendations while preparing the fiscal year budget 2024-25. The premier had expressed optimism about receiving a favorable response from the IMF, stating, “If the response from the IMF is positive, we will present it before the house on Wednesday”.

The IMF delegation, headed by Mission Chief Nathan Porter, visited Pakistan and conducted negotiations from May 13 to May 23 to discuss the country’s economic improvements.

Later, the statement released by the global lender highlighted that the Pakistani government is making significant efforts to increase revenue and underscored the need for fair tax collection from privileged sectors.