The Pakistan government is preparing for upcoming negotiations with the International Monetary Fund (IMF), with Prime Minister Shehbaz Sharif directing officials to pursue maximum possible relief under the loan program to ease pressure on the public and industry and accelerate economic growth, according to government sources.
Sharif has instructed economic managers to reassess and redefine Pakistan’s priorities ahead of the talks, stressing that the public and industrial sector cannot bear further economic strain.
He has ordered that “every possible avenue” be explored to secure relief from the IMF without undermining fiscal discipline, the sources said.
The prime minister has sought concrete proposals and a detailed plan within two weeks on how to persuade the IMF to allow targeted relief measures.
He has also asked for specific recommendations to reduce difficulties faced by industries and to formulate a solid strategy for industrial revival in the next round of negotiations.
Officials said Sharif emphasized that future discussions with the IMF should identify pathways that help speed up economic growth, rather than relying solely on austerity-driven measures.
He has directed that Pakistan’s growth-oriented priorities be clearly communicated to the IMF during talks.
According to the sources, Sharif has already discussed relief-related matters with IMF Managing Director Kristalina Georgieva, who assured Pakistan of full cooperation while the country remains under the IMF loan program.
'Delicate balancing act'
Economists say the government faces a delicate balancing act. “Pakistan does have some room to seek targeted relief, particularly for industry and the salaried class, but any concessions will depend on the government’s ability to demonstrate credible revenue measures and strict adherence to broader fiscal targets,” said an economist. “The IMF’s focus will remain on sustainability, even if growth-friendly adjustments are considered.”
In preparation, the Finance Ministry’s External Finance Wing and the Budget Policy Directorate have been issued special instructions to work on relief-focused measures.
The Federal Board of Revenue has also been directed to increase tax collection during the current fiscal year, including by expanding revenue from non-traditional sources.
Finance Ministry officials have been assigned special tasks to ensure implementation of IMF-agreed targets, while simultaneously working on options for flexibility within the program.
The government plans to highlight measures aimed at boosting investment and providing relief to salaried individuals during the negotiations.
Sharif has also instructed officials to make every effort to secure reductions in the so-called super tax on industries and large companies, as well as cuts in power tariffs, to support industrial activity.
He has called for detailed working to seek tax concessions and other relief measures within the framework of the IMF program.
The prime minister has set an ambitious target of achieving economic growth of 5% to 6% over the next two years and directed officials to prepare a comprehensive plan for major relief measures that remain consistent with IMF requirements and broader economic discipline, the sources said.
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