IMF may lower Pakistan’s health and education spending target

Summary

• The International Monetary Fund (IMF) is considering a reduction in Pakistan’s health and education spending target as provincial governments face increasing fiscal pressure.
• Last year, combined provincial spending on health and education fell about Rs370 billion short of the agreed target.
• The IMF had previously considered making the health and education spending target stricter by converting it from an indicative target into a quantitative performance criterion.

AI Generated Summary

The International Monetary Fund (IMF) is considering a reduction in Pakistan’s health and education spending target as provincial governments face increasing fiscal pressure.

Under the current IMF programme, the provinces are expected to collectively spend more than Rs4.2 trillion on health and education during the current fiscal year. However, government officials believe the target is likely to be missed again.

Discussions with provincial authorities have indicated that a revised target of around Rs3.9 trillion could be considered. Even with the proposed reduction, provincial budget allocations would remain about Rs200 billion below the revised requirement.