IMF deal: a boon and a burden

The caretaker government is jubilant, feeling a sense of vindication. The market, in turn, embraced the International Monetary Fund (IMF) agreement with warmth. The deal unlocked the critically needed second $700 million tranche, bringing the total disbursement to $1.9 billion, within the $3bn bailout framework deemed essential for Pakistan’s financial stability. While the business community expressed qualified support, ordinary Pakistanis dread further hardships due to the inherent conditions of the package. The IMF obligates the government to implement stabilisation policies, leading to increased taxes, levies, elevated energy rates and reduced development spending. To address the substantial budget deficit, the donor often recommends a halt on government recruitment and advocates leaner state-owned enterprises before a potential sale. Unfortunately, the resulting impact, including inflation, job losses and cuts to development spending, disproportionately hurt the working masses.