Prime Minister Shehbaz Sharif reaffirmed his government’s determination on Thursday to accelerate institutional reforms and consolidate macroeconomic stability, saying Pakistan is now going from the recovery to sustained growth.
“With the grace of Allah, Pakistan is now going from economic stability to sustainable growth,” said Shehbaz Sharif at a high -level meeting with a delegation from the International Monetary Fund (IMF) led by Jihad Azour at the PM office.
He stressed that the government’s absolute priority was not only to maintain macroeconomic gains but also to eliminate complete, crucial institutional reforms for long -term resilience.
The discussions during the meeting focused on the implementation of the current program of the International Monetary Fund (IMF) in Pakistan.
The two parties expressed their satisfaction on the progress made and the positive impact of the current reforms.
The IMF delegation praised the reforms undertaken by Islamabad and provided continuous continuous support for the economic stabilization of Pakistan and the inclusive growth program.
The meeting was also followed by key members of the cabinet, notably the federal ministers Ahsan, Iqbal Cheema and Muhammad Aurangzeb, the secretary finance Imdadullah Bosal, the president of the FBR Rashid Mehmood Langrial and the senior officials.
IMF regional director Jihad Azour visits Pakistan this week in the midst of negotiations for the new budget approval, because both parties take the time to converge on key issues of the increase in taxes and rationalization expenses.
Government sources have told L’Express PK Press Club that Jihad Azour, director of the IMF for the Middle East and Central Asia, goes to Pakistan 10 days after the approval of the second loan tranche of the $ 7 billion program, despite the opposition of India. Azour’s visit is a testimony to smooth relations between the lender and the borrower, despite the negative campaign of New Delhi.
The Ministry of Finance and the resident representative of the IMF have remained tight on the objective of the visit at a time when the IMF staff are already in Pakistan to conclude an agreement on the new budget for the 2025-26.
An official of the main government said that the Government would tackle outstanding budgetary problems with the director of the IMF, in particular with regard to the main spending items. The IMF has imposed a new condition in Pakistan that the government must obtain parliamentary approval of the new budget in accordance with the IMF personnel agreement to achieve the programs’ objectives. This leaves little space for the government to implement its own program, although Prime Minister Sharif wishes to relieve the salaried class.
Sources have indicated that the tax objective, defense expenses and certain questions related to subsidies were being discussed. The federal government has decided to allocate nearly 2.504 billions of rupees for defense expenses in the next financial year, 18% higher than this year’s allowance. However, the IMF staff report published on Saturday has shown defense expenses to 2.414 rumbox, an increase of 12%. Certain grant subsidies and allowances have not yet been finalized.
The Federal Board of Return (FBR) presented tax proposals for the next year to the Prime Minister on Monday. The PM has also informed that the FBR tax objective could be approximately RS14.07 Billion, which is around 240 billion less rupees than the priority to mutually agreed between the IMF and the government for the 2025-26 exercise, they added.
However, it is possible that the government considerably increases oil withdrawal rates from the 2025 financial bill. The IMF has provided the collection of oil withdrawals to more than 1.3 billion of rupees for the next fiscal year, which could become the greatest source of income without tax if the government is starting to load RS100 by Libation liter with gasoline and diesel. The current rate is RS78 per liter.
