Pakistan has announced significant reforms aimed at restructuring its government workforce and reducing expenditures as part of its agreement with the International Monetary Fund (IMF). These reforms are tied to a $7 billion loan package recently approved by the IMF. As part of the agreement, Pakistan will eliminate around 150,000 government positions, close six ministries, and merge two others. This comes after the IMF disbursed over $1 billion as the first tranche of the assistance package, which was contingent on Pakistan’s commitment to cut spending, boost its tax-to-GDP ratio, and extend taxes to sectors like agriculture and real estate.
Finance Minister Muhammad Aurangzeb outlined the reform plan, emphasizing that it would likely be the last IMF program for Pakistan. He stressed the importance of implementing the country’s policies to demonstrate financial self-sufficiency.
Restructuring Government
As part of the restructuring, ministries are being “right-sized,” with the decision to close six ministries already in place. Additionally, 150,000 posts across various departments are set to be eliminated. Aurangzeb also highlighted the growth in Pakistan’s tax base, noting that 732,000 new taxpayers have been registered this year, increasing the total number of taxpayers from 1.6 million to 3.2 million.
The finance minister expressed optimism about Pakistan’s economic trajectory, citing an increase in foreign exchange reserves and a drop in inflation to single digits, attributing these improvements to effective government policies.
