Karachi, February 12, 2025 – Prime Minister Shehbaz Sharif has announced that the International Monetary Fund (IMF) has given a positive response to Pakistan’s proposed measures for reducing production costs, including cutting duties and energy costs. The IMF has asked for a detailed plan, which will be developed through consultations with provincial authorities, in order to further support Pakistan’s ongoing economic reforms.
Addressing the Federal Cabinet on Wednesday, PM Shehbaz Sharif shared details from his recent meeting with IMF Managing Director Kristalina Georgieva, highlighting the importance of lowering production costs for driving economic growth. According to the Prime Minister, the conversation focused on the need for reduced energy costs and reformed duty structures to support the country’s industrial growth, exports, and overall economic performance.
PM Shehbaz emphasized that he had conveyed to Georgieva that the country’s industries, exports, and economy will only experience substantial growth if production costs, especially in the power sector, are reduced. “Growth will only be possible when our duty structure and energy costs decrease,” said the Prime Minister, pointing to the need for structural changes in the cost of production to enable a competitive business environment.
In response, IMF Managing Director Georgieva expressed her support for the proposal, brushing off concerns that the IMF would oppose such measures. She encouraged Pakistan to submit a comprehensive plan for consideration, signaling the IMF’s willingness to back the country’s efforts toward reducing production costs. PM Shehbaz revealed that he has directed Pakistan’s Deputy Prime Minister to work on this detailed plan with provincial consultations before formally approaching the IMF for approval.
The Prime Minister also shared that Georgieva praised Pakistan’s economic team for their continued commitment to the ongoing IMF-supported programme. She acknowledged the progress made by the government in implementing structural reforms and ensuring fiscal discipline, both of which have played an important role in restoring economic stability. The IMF chief’s positive feedback highlights the ongoing cooperation between Pakistan and the IMF, as the country continues its efforts to stabilize its economy and lay the foundation for sustainable growth.
On the sidelines of the World Government Summit (WGS) 2025, which took place earlier this week, PM Shehbaz met Georgieva ahead of the first review of Pakistan’s $7-billion IMF bailout package. The meeting underscored Pakistan’s continued commitment to implementing reforms and maintaining fiscal discipline as part of the Extended Fund Facility (EFF) programme.
The discussions between PM Shehbaz and Georgieva also focused on Pakistan’s progress under the IMF programme and the role of structural reforms in driving the country’s economic recovery. The Prime Minister highlighted that these reforms are crucial for ensuring long-term economic stability and growth.
In a separate development, a three-member IMF mission is currently in Pakistan to assess the country’s performance under the EFF programme, which will help determine the next steps in Pakistan’s ongoing economic stabilization process. The findings from this mission will be critical in setting the stage for the upcoming review of the IMF programme in March 2025.
Pakistan’s engagement with the IMF remains an essential component of the country’s economic recovery, as the government continues to focus on reducing production costs and implementing structural reforms. The positive response from the IMF to Pakistan’s proposals is seen as a key step in achieving the necessary adjustments to create a more sustainable and competitive economy.