Statements of support for progress achieved in stabilising the economy and advancing structural reforms agreed under the ongoing upfront, extremely harsh International Monetary Fund (IMF) programme conditions, has been forthcoming from staff and management of multilaterals, rating agencies as well as over 40 plus Pakistani Cabinet in general and the economic team leaders in particular.

There is no doubt that some macroeconomic indicators have visibly improved, as noted in the August Economic Update and Outlook uploaded on the Finance Division website on 29 August 2025. Remittances rose by 7.4 percent in July this year (USD 3,214 million in total) compared to the same month in 2024 (USD 2,994 million) due no doubt to remittance incentives executed by the State Bank of Pakistan (SBP), which include zero cost/free send model for sender and receiver on eligible residence transactions, reimbursement of 20 Saudi riyals for every USD 100 transaction growth over the previous year and an additional 10 riyals for transaction exceeding 10 percent or USD 100 million over the previous year.

It is, however, relevant to note that the Finance Division proposed to the Economic Coordination Committee of the cabinet (ECC) on 27 July 2025 to reduce these incentives, however the decision was rightly deferred subject to the outcome of an impact and sensitivity analysis.

There are obvious concerns that given the scale of destruction wrought by the floods this year the envisaged fiscal space, narrow though it was to begin with, would have further diminished and hence the need to reduce incentives would rise from the Treasury’s perspective.

It is relevant to note that the Update refers to the Bureau........

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