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The International Monetary Fund (IMF) has called on Pakistan to immediately end its broad fuel subsidy scheme as part of its latest economic review.
The IMF said Pakistan would receive $1.21 billion after the staff-level agreement. The IMF Executive Board will now consider the disbursement.
The global lender praised Pakistan’s efforts to meet its economic targets. It said the IMF programme had helped improve economic stability and speed up reforms.
According to the IMF, Pakistan’s economy grew by 4% from July to March 2026.
The Middle East crisis later affected economic activity. Growth slowed to 3.6%, according to the statement.
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Inflation reached its highest level in May 2026. Strong remittances, however, helped limit pressure on the current account deficit.
The IMF urged Pakistan to phase out the fuel subsidy scheme.
It said the government should not expand subsidies further. Any fuel support should target deserving consumers.
The IMF called for an immediate end to the costly and broadly distributed fuel scheme.
It also said support during periods of higher oil prices should remain limited, targeted and time-bound.
The IMF also called for stronger reforms across Pakistan’s energy sector.
It urged authorities to recover outstanding dues and reduce production costs. The lender also called for better recoveries and lower losses in the gas sector.
The IMF said timely tariff adjustments remain essential. It also stressed the need for reforms that can reduce energy costs.
The global lender asked the State Bank of Pakistan (SBP) to maintain a sufficiently tight monetary policy.
The IMF said the policy should keep inflation within an appropriate range.
It also urged Pakistan to strengthen its foreign exchange reserves. The lender said energy reforms and timely tariff adjustments would support economic stability.
[…] IMF Calls for Immediate End to Broad Fuel Subsidy Scheme in Pakistan […]