Pakistan is set to cut around 150,000 government jobs, close six ministries, and merge two others as part of economic reforms agreed with the International Monetary Fund (IMF). The cuts are tied to a USD 7 billion loan package from the IMF, which aims to help the country stabilize its economy.
Pakistan’s finance minister, Muhammad Aurangzeb, announced the decision as part of the broader agreement with the IMF. He emphasized that this would likely be Pakistan’s final IMF program, provided the country successfully implements its economic policies.
The restructuring includes downsizing government ministries and eliminating positions across various departments. Right-sizing within the ministries is underway, and the cuts are expected to be implemented soon. The minister confirmed, “150,000 posts across various ministries will be eliminated,” as part of these austerity measures.
As part of the IMF’s conditions, Pakistan has committed to cutting expenditures and increasing its tax-to-GDP ratio. The government plans to expand taxation to previously under-taxed sectors like agriculture and real estate. Pakistan has already added around 732,000 new taxpayers this year, bringing the total number to 3.2 million.
Aurangzeb also noted that Pakistan’s economy is on the path to recovery, with foreign exchange reserves reaching their highest level in recent years. Inflation, which has long been a major concern, has decreased, reportedly dropping to single digits due to government policies.
Pakistan narrowly avoided an economic collapse in 2023, when a USD 3 billion loan from the IMF helped the country avert default. With the new USD 7 billion deal in place, Pakistan’s government hopes to continue stabilizing its economy and ensuring sustainable growth.
Sources By Agencies