IMF 'asks' Pakistan to adopt austerity in new development projects

ISLAMABAD: The International Monetary Fund (IMF) has reportedly proposed tight austerity conditions in Pakistan’s development budget and expressed concerns about the allocation of funds for new projects in the current financial year, ARY News reported on Friday.

Following the IMF austerity conditions proposal, the relevant authorities are considering halting funds for the new development projects in the country.

IMF in their proposal instructed the caretaker government of Pakistan to allocate funds for the ongoing development projects, specifically for the development project near completion instead of announcing new development projects in the country.

In light of these recommendations, the relevant authorities are to redefine the priorities of its development projects.

Sources also indicated that the international money lender expressed no objections to providing funds for the rehabilitation of districts affected by the floods in Pakistan.

Read more: Gas tariff likely to be increased by 100pc on IMF demand

Prior to this, the International Monetary Fund (IMF) has asked Pakistan to ‘immediately raise’ gas tariff.

The IMF is seeking 100pc ‘rise’ in the gas tariff to minimize the losses and circular debt in Pakistan’s gas sector.

The international lender showing concerns about not increasing the gas tariff from July 1 during a virtual meeting with the Pakistan finance ministry officials, demanded the caretaker government of Pakistan to immediately approve the hike in gas tariff, the source claimed.

They further said IMF asked the Pakistan finance ministry that denying the increase in gas tariff is a ‘violation’ of the Standby Agreement.

IMF has suggested for recovery of Rs46 billion loss of gas companies from July to September. During the talks, the IMF officials were informed that caretaker Finance Minister Dr Shamshad Akhtar is in China.

The minister will return to Pakistan today, the sources said.

In this context, the Economic Coordination Committee (ECC) meeting has been summoned on Monday to give a nod for jacking up the gas rates.