ISLAMABAD: The government has formally sought proposals from key economic ministries to identify potential concessions from the International Monetary Fund (IMF) aimed at easing constraints on economic growth and bringing greater realism to the budget framework.
According to government sources, the decision was taken at the highest level following a review that concluded the current economic structure is failing to attract meaningful foreign investment or deliver sustainable growth. Finance Minister Muhammad Aurangzeb chaired the first meeting with economic ministries on Thursday, directing them to submit proposals outlining a future roadmap and recommending measures that could be implemented before or incorporated into the next budget.
The exercise is being conducted within the framework of Pakistan’s IMF programme, which runs until September 2027, while a parallel assessment is exploring options for a potential exit after the completion of the ongoing $7 billion bailout package. Planning Minister Ahsan Iqbal has previously linked a permanent IMF exit to raising exports to $63 billion by 2029 — nearly double current levels.
Once received and refined, the proposals may be shared with the IMF for vetting. A friendly country has reportedly assured Islamabad of support at the Fund for measures that are currently hindering growth. The finance ministry has circulated a detailed proforma to ministries, seeking macroeconomic analysis, growth impact and the budgetary cost of each proposal, including subsidy requirements or potential revenue losses.
However, securing IMF approval is expected to be challenging, as the Fund is closely monitoring the programme through 64 conditions. A prime ministerial panel’s proposal for Rs1 trillion in tax relief has met resistance, with the IMF reluctant to ease even limited tax measures, sources said.
The move follows recent briefings by the Planning Commission to civil and military leadership, warning of a low-growth, low-investment trap that is fuelling unemployment and social pressures. It has also reinforced concerns that reliance on foreign consultants and external financing alone may not address Pakistan’s structural weaknesses.
Separately, Pakistani and Saudi authorities have conducted a comprehensive review of Pakistan’s economy ahead of potential Saudi investments. The assessment found weak value chains across industries, limiting export competitiveness and requiring substantial policy reforms.
Under the Saudi-Pakistan Economic Cooperation Framework, Pakistan has prepared a 90-day roadmap to activate 12 joint working groups covering eight priority sectors, including agriculture, IT, mining, manufacturing, energy and finance. The initiative aims to identify structural gaps, value-addition opportunities and targeted reforms with measurable outcomes.
The government has also instructed ministries to prepare detailed value-chain mappings and develop a targeted investment framework to attract domestic and foreign investment into export-oriented sectors. Officials acknowledged that even textiles lack a fully integrated value chain and that Pakistan must significantly raise the share of skilled workers to benefit from foreign investment.
The assessments are expected to be completed by March, ahead of the next IMF programme review scheduled for late February.
Story by Shahbaz Rana
