Government Cuts Vacant Posts to Meet IMF Spending Commitments
Pakistan’s federal government will eliminate up to 60% of vacant positions in ministries and attached departments as part of IMF‑mandated fiscal consolidation, while also tackling electricity circular debt ahead of the next IMF review.
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How This Affects the Exchange
Sector Effect
Negative · Do not buy
Public‑sector job cuts and fiscal tightening weigh on the Economy and Markets, suggesting a cautious stance – Don't buy.
Sectors & Direction
Desk read
Desk call: Do not buy · Negatively affected
- EconomyNegatively affected
- MarketsNegatively affected
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Sectors: Economy, Markets — Negative · Do not buy. PSX tickers: OGDC, PPL, MARI, PSO, SNGP, ATRL. Public‑sector job cuts and fiscal tightening weigh on the Economy and Markets, suggesting a cautious stance – Don't buy.
Full Story
Open on ProPakistani## Government Job Reductions
The federal administration announced it will scrap up to 60 percent of vacant posts across federal ministries and attached departments. This measure is intended to honour fiscal‑contraction commitments made with the International Monetary Fund (IMF) and to curb public‑sector wage bills.
## IMF Programme Pressures
The move comes as the government prepares for an upcoming IMF review. Pakistan is expected to showcase progress on structural reforms, particularly in the electricity and gas sectors, where circular debt remains a major concern. Successful completion of the review could unlock roughly $1 billion from the next IMF instalment, plus an additional $200 million earmarked for climate‑resilience projects.
## Electricity Sector Challenges
Ahead of the IMF talks, the government is also under pressure to address the growing circular debt in the power sector. Prime Minister Shehbaz Sharif has instructed his economic team to devise an alternative plan to mitigate rising electricity tariffs, aiming to stabilise the sector and meet IMF debt‑reduction targets.
## Outlook
If the IMF review yields a positive outcome, the disbursement of funds could provide short‑term liquidity relief. However, the immediate impact of large‑scale public‑sector job cuts may dampen domestic consumption and increase unemployment concerns, posing risks to overall economic sentiment.