The International Monetary Fund (IMF) has directed the Government of Pakistan to exclude provincial development initiatives from the Public Sector Development Program (PSDP) for the current fiscal year.
At present, the federal government is financing 168 provincial projects with a total estimated cost of PKR 1,100 billion, of which PKR 300 billion has already been disbursed. The PSDP for fiscal year 2024–25 includes 66 projects in Punjab valued at PKR 175 billion, 64 in Sindh totaling PKR 488 billion, 111 in Balochistan amounting to PKR 429 billion, and 20 in Khyber Pakhtunkhwa with a cumulative worth of PKR 72 billion.
According to ARY News, the IMF has prohibited any further expenditure of PKR 800 billion on these projects.
This directive comes as Finance Minister Muhammad Aurangzeb reaffirmed the government’s commitment to advancing its economic reform agenda. On July 12, 2024, Pakistani authorities and the IMF reached a staff-level agreement under the Extended Fund Facility (EFF) for an amount equivalent to SDR 5,320 million (approximately USD 7 billion), which received final approval from the IMF Executive Board in late September.
In a related development, Pakistan and the IMF concluded a new $1.3 billion arrangement last month and completed the first review of the ongoing 37-month bailout program.
