IMF demands Pakistan to increase gas, electricity prices

Islamabad: The International Monetary Fund (IMF) expressed that the approval of the 2024-25 budget by Pakistan is insufficient and has called for further actions, the sources familiar with the development said on Saturday.

The sources said that the IMF demanded Pakistan to increase electricity and gas prices starting from July 1 and to promptly implement the National Electric Power Regulatory Authority's (NEPRA) decision on raising gas and power tariffs.

The National Assembly recently sanctioned the Federal Budget for the fiscal year 2024-25, with a total allocation of Rs18,870 billion.

The IMF also insisted on the elimination of tax exemptions and subsidies, describing these measures as “essential” for the country's economic recovery.

Despite these demands, the IMF has praised the government's challenging economic decisions in the budget, including the reduction of tax exemptions and subsidies, as per sources.

Additionally, the scheduled visit of the IMF delegation to Pakistan in the last week of June has been postponed. The team is now expected to visit in the second week of July, sources stated.

The federal budget for the fiscal year 2024-25 has a total outlay of Rs. 18.877 trillion. The budget details the government's fiscal policies and budgetary allocations for the upcoming financial year, presenting a comprehensive plan to address various economic and social challenges.

Earlier, Prime Minister Shehbaz Sharif mentioned that the government had to consider the International Monetary Fund's (IMF) recommendations while preparing the fiscal year budget 2024-25.

Prime Minister Shehbaz expressed optimism about receiving a favorable response from the IMF. "If the response from the IMF is positive, we will present it before the house on Wednesday," he added.

The IMF delegation, headed by Mission Chief Nathan Porter, visited Pakistan and conducted extensive negotiations from May 13 to May 23 to discuss the country's economic improvements.

The statement highlights that the Pakistani government is making significant efforts to increase revenue and underscores the need for fair tax collection from privileged sectors.