The International Monetary Fund (IMF) has reportedly presented stringent austerity conditions regarding Pakistan's development budget. There are concerns regarding the allocation of funds for new projects in the current financial year, as reported by ARY News.
As a response to the IMF's proposal on austerity conditions, the authorities in Pakistan are contemplating the suspension of funds for new development projects across the country. The IMF's proposal instructs the Pakistani caretaker government to allocate funds to ongoing development projects, particularly those near completion, instead of introducing new development projects.
In light of these recommendations, the relevant authorities are expected to reevaluate their development project priorities. Additionally, sources suggest that the IMF has expressed no objections to providing funds for the rehabilitation of districts affected by floods in Pakistan.
Notably, the IMF had previously urged Pakistan to "immediately raise" gas tariffs to address the losses and circular debt in the country's gas sector. The IMF is seeking a 100% increase in gas tariffs and voiced concerns about the lack of a tariff increase from July 1 during a virtual meeting with Pakistan's finance ministry officials. They urged the caretaker government to promptly approve the gas tariff hike.