Health, education face IMF cut

According to The Express Tribune, the International Monetary Fund may lower its health and education spending goal to about Rs3.9 trillion from Rs4.2 trillion, as provinces face cash pressures. Government sources said the IMF now sees the target being missed again this fiscal year, after last year's combined outlay fell Rs370 billion short.

Provincial allocations are already Rs500 billion below the Rs4.2 trillion needed under the $7 billion bailout. Sindh and Punjab reportedly cited strain from committing Rs1.7 trillion in cash surplus and grants to the federal government, while Khyber-Pakhtunkhwa, which has not made such a commitment, told the meeting it would hit its targets.

Even with a Rs300 billion reduction that brings it to Rs3.9 trillion, roughly Rs200 billion of shortfall would persist against allocations. Final discussions are pending, with talks due to end Wednesday; a staff-level agreement would unlock $1 billion from the package and over $200 million under the climate facility. The IMF had also considered making the spending condition a quantitative performance criterion, where a breach would require an executive board waiver.