The International Monetary Fund (IMF) has rejected Punjab’s plan to provide cheap electricity, calling it “fiscally reckless.” The IMF has imposed new conditions on Pakistan, including ending the temporary subsidy by September 30 and ensuring no provincial government introduces new subsidies during the 37-month Extended Fund Facility program.
The IMF also introduced conditions that restrict provincial governments from introducing policies or actions that could undermine commitments made under the $7 billion program. This includes consulting with the Finance Ministry before modifying or adopting measures that could affect structural benchmarks and key actions agreed with the IMF.
Pakistan’s new IMF program covers five budgets and policies of five governments, with a focus on provincial policies and budgets. The finance ministry is struggling to secure approval for the $7 billion program, with the IMF board deferring the case due to Islamabad’s inability to secure loan rollovers and arrange new financing.
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