Pakistan Secures IMF-Backed Electricity Relief Amid Economic Reforms

In a major relief for electricity consumers across Pakistan, the International Monetary Fund (IMF) has approved a Rs1 per kWh reduction in power tariffs. This initiative, aimed at easing financial pressure on households and businesses, is expected to bring relief amounting to Rs100 billion nationwide.

How Will the Relief Be Funded?

The reduction in electricity tariffs will be financed through revenue collected from a levy on captive power plants using natural gas. This measure ensures that the subsidy does not strain the national budget while promoting energy sector sustainability.

A Step Towards Economic Stability

The IMF’s decision comes as part of Pakistan’s broader energy sector reforms, aligning with its Extended Fund Facility (EFF) agreement. The country recently reached a staff-level agreement with the IMF, unlocking a $1 billion tranche, which is expected to support macroeconomic stability.

Economic Outlook: Signs of Recovery

The IMF has expressed optimism regarding Pakistan’s economic trajectory, noting that inflation has dropped to its lowest level since 2015. The latest developments indicate progress toward financial stability, with targeted reforms aimed at enhancing efficiency and reducing fiscal pressure.

Final Thoughts

The reduction in electricity tariffs provides much-needed relief to Pakistani consumers, offering a cushion against rising living costs. As Pakistan continues implementing IMF-backed reforms, the country moves closer to a more stable and sustainable economic future.