ISLAMABAD – The International Monetary Fund (IMF) has recommended that the Government of Pakistan exclude provincial development projects from the upcoming federal development budget, according to reports from ARY News citing official sources.
The IMF has advised the federal government to refrain from funding initiatives that fall under provincial jurisdiction following the 18th Constitutional Amendment, which devolved several responsibilities to the provinces.
168 Projects to Be Removed from Federal Portfolio
Sources revealed that in response to the IMF’s guidance, the federal government will remove 168 provincial-level projects from the federal development program. These projects, which have reportedly seen slower progress, carry a total estimated cost of PKR 1,100 billion. So far, the federal government has already spent approximately PKR 300 billion on them.
However, under the IMF’s conditions, the remaining PKR 800 billion in funding will not be allocated through the federal budget. These development efforts will now be the responsibility of provincial governments, who are expected to complete them through their own development budgets.
Reform Commitments Reaffirmed by Finance Minister
The development comes at a time when Finance Minister Muhammad Aurangzeb is in Washington, D.C., where he met with IMF Managing Director Kristalina Georgieva during the World Bank/IMF Spring Meetings 2025.
During the meeting, the Finance Minister expressed gratitude for the Staff-Level Agreement reached under the Extended Fund Facility (EFF) and a new arrangement under the Resilience and Sustainability Facility (RSF). He reiterated Pakistan’s commitment to maintaining momentum on structural reforms and achieving long-term economic stability.
Engagements with Global Financial Institutions
In addition to his meeting with the IMF, the Finance Minister held talks with World Bank Group President Ajay Banga, where he acknowledged the Bank’s continued support in shaping and implementing Pakistan’s Country Partnership Framework (CPF). He also discussed strategies to enhance project efficiency and focus on measurable development outcomes.
Muhammad Aurangzeb also met with Robert Kaproth, Assistant Secretary at the U.S. Department of the Treasury, where he shared an overview of Pakistan’s improving macroeconomic indicators and the government’s progress on reforms in taxation, energy, privatization, pensions, and state-owned enterprises (SOEs).
Private Sector and Regional Trade Highlighted
At a luncheon hosted by the US-Pakistan Business Council at the U.S. Chamber of Commerce, the Finance Minister emphasized Pakistan’s focus on regional trade, market diversification, and sectoral expansion. He invited international investors to explore emerging opportunities in Pakistan’s evolving economic landscape.
