ISLAMABAD (PEN) : In a move to meet IMF conditions, Pakistan has made a significant cut to its Public Sector Development Program (PSDP), slashing it by Rs. 300 billion, according to ARY News.
The Planning Commission has approved new development projects and issued a scorecard that will restrict the PSDP for the upcoming fiscal year. The focus will be on priority projects, with only 10% of new development initiatives allowed in the next year. The guidelines follow the Public Investment Procedure and Parameters.
While the federal government will continue to support specific regional projects, subsidies for provincial-type initiatives under the PSDP will be limited. As a result, the PSDP for the current fiscal year has been reduced to Rs. 1,100 billion, a reduction of Rs. 300 billion. Federal ministries and divisions have already taken steps to limit their PSDP spending, with Rs. 220 billion allocated to the development budget from July to January.
This decision comes after a meeting between Prime Minister Shehbaz Sharif and IMF Managing Director Kristalina Georgieva, where they discussed Pakistan’s ongoing IMF program and the macroeconomic stability achieved through the government’s comprehensive reform efforts. The meeting, held at the World Government Summit in Dubai, highlighted Pakistan’s commitment to structural reforms and fiscal discipline, which have been crucial in stabilizing the economy and will be key to ensuring sustainable growth in the future.
Prime Minister Shehbaz Sharif emphasized the progress made under the IMF’s Extended Fund Facility (EFF), which has played a vital role in stabilizing Pakistan’s economy and setting it on a path toward long-term recovery. He reassured the IMF of Pakistan’s dedication to continuing reforms, particularly in crucial areas like tax reform, energy efficiency, and private sector development.
The Prime Minister reiterated Pakistan’s commitment to economic prudence, efficiency, and sustainability, viewing these as the foundation for achieving inclusive and lasting growth.
