Government, IMF reach consensus to increase salaries, pensions 

The third round of talks between the Pakistani government and the International Monetary Fund also saw an agreement to not increase electricity and gas tariffs until September 2020.

LAHORE/ISLAMABAD: The Pakistan government and the International Monetary Fund (IMF) reached a consensus on Tuesday, on not putting a freeze on the increase in salaries and pensions of government employees and keeping electricity and gas tarrifs at their current level, in the upcoming budget.  

The issues came under discussion during the third round of talks between the Pakistani government and the International Monetary Fund (IMF) which ended on Tuesday, June 9. 

According to reports, the IMF had asked the Pakistani government to cut spending during the previous meetings. However, the government refused to do so citing the need to protect government employees and pensioners and the citizens battling the Covid-19 induced economic meltdown, from the effects of inflation. 

The agreement to not put a hold on the increase in salaries and pensions came after the government gave assurance to the IMF that it will not further increase its deficit and will  increase its non-tax revenues.

Media reports on May 30th had informed that the government was expected to raise salaries and pensions by 15-20 percent. However, currently there has been no official word from the authorities regarding the percentage raise to be announced on June 12 during the presentation of the federal budget. 

As per the consensus, the conditions of IMF related to the loan agreement, would remain relaxed till September 30, and after October, Islamabad will fulfill the conditions which are linked with the Extended Fund Facility (EFF) .

Earlier, The finance team had made it clear to the IMF that it will not be able to achieve the previously fixed targets under the prevailing circumstances.

Earlier on June 6, Director Communication Department IMF Gerry Rice stated that the IMF and Pakistani authorities remain closely engaged to bring the second review of the EFF to a positive conclusion, while taking into account the new conditions the fund is facing in Pakistan, and to ensure the programme delivers on its objectives.

“On the EFF, which was already in place with Pakistan, I can tell you that technical discussions with the authorities continue. They remain fluid with a view to bringing that second review of that program, that EFF, to a positive conclusion, as soon as possible. We’re working with the authorities, constructively, to ensure that that can be brought to a positive conclusion, as soon as possible, while taking into account the new conditions that we’re facing in Pakistan, and to ensure the program delivers on its objectives,” he said. 

The IMF has already provided emergency financing of about $1.4 billion in April this year, in a bid to help the country deal with the COVID-19 crisis.

The Pakistan government is set to unveil the budget for the next year on June 12.

It was revealed on June 6 that the federal government had decided to present a tax-free budget for the fiscal year 2020-21. Sources privy to the matter said that the government will not introduce any new taxes in the forthcoming budget while harsh measures will be taken to curb tax evasion.

The Federal Board of Revenue (FBR) is expected to be given special powers to stop tax evasion in the country.

Muhammad Faran Bukhari
Muhammad Faran Bukhari
The writer is an economics and business journalist reporting for Profit. He is currently an MBA candidate at LUMS University and holds a Bachelors degree in Economics and Politics from the same university. He can be reached at [email protected] or at


  1. Excellent description even informative. It is time consuming process to control tax evasion. However, it is good news for gov’t employees not be panic about freezing of salaries.

    • Very Good proposal for increase in salary and pension in the budget. For Medical Allowance it is requested to make % of BPS because old retired less amount and new gets higher amount of medical allowance. This may also be made % increase in regular budget proposals.

  2. Sir,
    Government staff salary should be related to efficiency and productivity, with good achievers been rewarded with bonuses. The inefficient being be sent on improvement course, while corrupt be be prosecuted and dismissed from the service.

    • I am very sorry to say that govt of pakistan has forgetten his prevous speach and fake promises during election campaign now they are asking from IMF even that permission of wash room The nation of Pakistan can not excuse any govt or persons who are sold their every thing to IMF .I suggest that please what so ever return loan of IMF and start living on our own feet .stop getting loan on interest which is not according to islamic law we can not achieve any goal without Islamic quranic law in country . We are muslim but getting loan on interest
      We are muslim but opened markets on friday
      We are muslim but starting education of child with ABC
      We are muslim but our law is accdirdng to British govt
      We can not improve our economic without islamic law please note it

        • Pay pension pay zayada zor he kia aata cheeni soap daaleen chiken matton beef cotton cloth and all things of daily useful milk vegitables and fruit come low rate

      • @Ali Akbar Bhai

        Loan on interest : You are right
        Open markets on Friday : There is no restriction in Islam to work on Friday
        Starting education with ABC : English is a language and Islam does not restrict study of any language. What about American Muslims then ?
        Law according to British Govt : You are right
        Cannot improve economy without Islamic Law : Many countries have improved their economies without Islamic Law. But if muslims follow this path they will not go to heaven, economy can still be improved

    • Dear do think they will give it to right person . I am very much certain only 1% will get remaining will be ghost

  3. شرم کرو حیا کرو
    کچھ دن بعد واش روم جانا کہ نہیں یہ بھی imf سے ہی پوچھنا
    جب جھکا تو غیر کے آگے نہ تن تیرا نہ من

  4. It looks Pakistan has been sold to IMF and we are tanant. Big shame for PTI if they look at their old speeches about IMF etc.
    PTI has failed. Employees associations are demanding for 120% increase but according to my information they may compromise to 40% increase but not less. This time people have been changed and are more educated about fake promises of governments. Looks like last budget of PTI.

    • کٹھ پتلی بیغیرت پی ٹی آء حکومت غیر ملکی قلب ڈانسرز کا ٹولہ ایک چھڑی والے کی ۔سرپرستی میں ملک پر قابض ھیں پ

  5. Salary should be equal all govt.employs although he works in provincial govt. OR federal govt. No special allowances should be given. But honaria may be given.

  6. I guess 15% in salary and 10% in pension. But all this would be bullshit. Should be atleast 50% increase

  7. کام کر کے راضی کوئی نہیں
    تنخواہ کہتے ھیں 100% بڑھاو

  8. Theek farmaya. Ziada tar log mehnati hen aur mushkil sy do waqt guzara krtay hen. Har koi haram khor nahi.

  9. imran khan shb kehtay thy sucide krlnga qarza ni lunga…abi hr rk decision k lie IMF k paon pkr rha phr b youthie chup hen….sorry to say choootiye

  10. Actually Government servants have no will to perform their duties honestly neither they are trying since independence from last 72 years. major worst problem have been facing by Pakistan is dishonesty, selfish, redtapisim, nepotism polices, sluggish attitude, in government offices, unless until, employees in government service not loyal honest with their duties in the interest of country and become general public civil servants. this could be happend again and again. because the more than 95% employment got t hrough bribe, and political bases, and on personal relations, thats why they have no vision ,sluggish, dishonest and many more other issues with them those who appointed on true manner and never ever cooperate with dishonest, they are being real suffered during the whole life and corrupt dishonest enjoying through out the whole service. corrupt and dishonest get earn through illegal ways and honest who doest want to do illegal ways they are being suffering and corrupt only crying while they are only crying while they earning increases day by day. but their is separate issue either they live peacefully or what. first honest recruitment is the issue

  11. We are beggars by birth not an independent nation. We can do nothing without the signals of IMF and USA. We have been and are slave from the beginning to the end of this world. We are dependent upon Western and psychological slave if free that is only in books and in national songs. We are nothing and the whole nation is fail in this regard because of insincerity,greediness and violation of injunction of islam.

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