Pakistan is set to undergo major government reforms as part of its agreement with the International Monetary Fund (IMF), aiming to reduce workforce size and cut expenditures. The move comes in connection with a $7 billion loan package recently approved by the IMF. As part of these reforms, Pakistan will eliminate 150,000 government jobs, close six ministries, and merge two others. These changes follow the IMF's release of over $1 billion as the first installment of the assistance package, contingent on Pakistan's commitment to reduce spending, improve its tax-to-GDP ratio, and extend taxation to sectors like agriculture and real estate.
Finance Minister Muhammad Aurangzeb emphasized that this could be Pakistan’s final IMF program, urging the country to implement policies that ensure financial self-sufficiency.
Government Restructuring The restructuring involves "right-sizing" ministries, with six already set to close, and the elimination of 150,000 positions across various departments. Aurangzeb noted a significant increase in the country’s tax base, with 732,000 new taxpayers registered this year, raising the total number of taxpayers from 1.6 million to 3.2 million.
The finance minister expressed optimism about the nation's economic outlook, citing improvements in foreign exchange reserves and a drop in inflation to single digits. He attributed these gains to effective government policies.
Aurangzeb also announced the removal of the non-filer category, preventing individuals who do not pay taxes from purchasing property or vehicles.
The minister highlighted Pakistan’s economic progress, noting substantial growth in national exports, particularly in the IT sector, and increased investor confidence. He added that the government has lowered the policy rate by 4.5%, with expectations that both the exchange rate and policy rate will remain stable.
Aurangzeb concluded by stating that inflation had dropped to single digits due to government measures, reinforcing the positive direction of the economy.
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