IMF Criticizes Pakistan's Financial Management Amid Governance Challenges

The IMF has criticized Pakistan for its weak financial management and fiscal accountability, highlighting issues such as poor cash management, governance vulnerabilities, and lack of oversight. It recommends a series of governance reforms to enhance fiscal discipline and improve economic performance.

The International Monetary Fund (IMF) has voiced concerns over Pakistan's financial management, citing weak cash monitoring and a lack of accountability in public resource allocation. These concerns were raised in the IMF's Governance and Corruption Diagnosis Assessment (GCDA), a critical step for Pakistan to secure the next tranche of over USD 1.2 billion.

Despite being part of its 24th programme with the IMF, Pakistan continues to struggle with budget credibility, leading to various macro-critical governance issues. The IMF noted inefficiencies in public investment management, which result in project delays and cost escalations, making a strong case for immediate remedial actions.

To address these issues, the IMF recommends that Pakistan enhance cash management within the next three to six months by implementing a unified decision-making framework under a Single Treasury Account (TSA). Additionally, it calls for improved monitoring and accountability mechanisms to better control financial and non-financial assets and mitigate corruption risks.

(With inputs from agencies.)