Pakistan Cuts 150,000 Jobs, Dissolves 6 Ministries in IMF-Backed Reform
Pakistan has announced plans to abolish 150,000 government posts, close six ministries, and merge two others as part of reforms agreed upon with the International Monetary Fund (IMF) under a $7 billion loan deal.
PakistanImfLoan DealEconomic ReformsJob CutsReal EstateSep 29, 2024
The minister said that right-sizing within ministries was ongoing, and the decision to close six ministries would be implemented, while two ministries would be merged. Additionally, 150,000 posts across various ministries would be eliminated. Aurangzeb also said that the non-filers category would be abolished, and those not paying taxes would no longer be able to purchase property or vehicles. He claimed that the economy was moving in the right direction, with significant growth in national exports and IT exports, and stated that investor confidence regarding the strength of the economy was a major success.
The policy rate has been reduced by 4.5 percent by the government after coming to power, and Aurangzeb expressed optimism that the exchange rate and policy rate would remain as expected. Pakistan has negotiated a long-term loan with the IMF with the hope and commitment that it would be the last loan. However, many doubt this claim, as the country has already secured about two dozen loans from the Fund but failed to address the economy on a permanent basis.
Frequently Asked Questions
Why is Pakistan cutting 150,000 jobs?
Pakistan is cutting 150,000 jobs as part of its efforts to minimize administrative expenditures and implement reforms agreed upon with the IMF.
What is the IMF loan deal worth?
The IMF loan deal is worth $7 billion.
What are the conditions of the IMF loan deal?
The conditions of the IMF loan deal include cutting expenditures, increasing tax-to-GDP ratio, taxing non-traditional sectors like agriculture and real estate, limiting subsidies, and transferring some fiscal responsibilities to provinces.
Will this be the last IMF loan for Pakistan?
Pakistan has committed to making this the last IMF loan, but many doubt this claim given the country's history of securing multiple loans from the Fund.
What is the current state of Pakistan's economy?
Pakistan's economy has been struggling for years, but the government claims it is moving in the right direction, with significant growth in national exports and IT exports, and improved investor confidence.
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