The federal government has begun abolishing up to 60% of vacant positions across ministries and attached departments as part of measures aimed at reducing public expenditure. The decision comes as Pakistan continues implementing commitments agreed with the International Monetary Fund under its ongoing loan programme, with government departments being pushed to control costs and streamline their operations.
The reduction in vacant positions is part of broader efforts to contain the size of the federal government and limit expenditure on public administration. While the positions being abolished are currently vacant, the move is expected to reduce opportunities for future recruitment across federal ministries and their attached departments. The development comes amid continued pressure on the government to improve fiscal management and meet reform targets agreed under the IMF programme.
Pakistan is also preparing for the next review of its IMF programme, with discussions expected to cover progress on structural reforms and targets linked to the energy sector. The government is facing continued pressure over circular debt in both the electricity and gas sectors, making energy-sector reforms an important part of the upcoming talks. The authorities are expected to present updates on measures taken to address these financial challenges and improve the sustainability of the energy system.
Electricity prices are another major issue facing the government ahead of the IMF review. Prime Minister Shehbaz Sharif has directed his economic team to prepare an alternative plan to deal with rising electricity prices. The direction comes as the government seeks to balance IMF commitments with pressure to provide relief to consumers facing higher energy costs. Any changes to the existing approach will need to remain consistent with broader fiscal and energy-sector objectives.
The IMF mission is expected to visit Pakistan this month for the biannual review of the loan programme. During the discussions, Pakistani authorities are expected to present progress on agreed structural reforms and review targets for circular debt in the electricity and gas sectors. The government’s actions on public expenditure, energy reforms and other agreed measures are likely to form part of the assessment.
Successful completion of the review could unlock around $1 billion for Pakistan under the next installment of the IMF loan programme. Pakistan is also expected to receive an additional $200 million linked to climate resilience financing. The potential disbursements would provide additional financial support as the government continues working to strengthen its fiscal position and meet programme commitments.
The abolition of vacant federal positions therefore represents one element of Pakistan’s wider effort to reduce government spending ahead of the IMF review. While the immediate measure focuses on unfilled posts rather than existing employees, continued efforts to reduce expenditure could affect recruitment and staffing decisions across federal departments. The government will now need to demonstrate progress on its broader reform agenda while managing economic pressures related to electricity prices, circular debt and public finances.
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