IMF Urges Pakistan to End Fuel Subsidies as Budget Talks Begin

Pakistan has initiated preliminary virtual consultations with the International Monetary Fund regarding key targets for the upcoming federal budget.

According to sources from the Ministry of Finance, the IMF has recommended that the government discontinue subsidies on petroleum products to reduce fiscal pressure. The Fund emphasized the need for timely adjustments in energy and fuel prices to avoid accumulating financial burdens.

The IMF further advised that regulatory authorities’ recommendations on electricity and energy tariffs should be implemented without delay. It also proposed reducing tax exemptions and concessions in the upcoming budget.

In addition, discussions are underway to expand the tax base and reduce government expenditures. A key proposal includes increasing the tax-to-GDP ratio by at least one percent annually.

These measures are part of broader efforts to stabilize Pakistan’s economy and manage its growing debt obligations effectively.