2 min read
Pakistan’s fiscal system has once again come under scrutiny as the IMF flagged serious weaknesses in cash management, budget oversight and financial controls, warning that the gaps are undermining transparency, governance and economic stability. The new findings highlight the core issues behind the story: Pakistan’s persistent struggle with treasury discipline and ineffective management of public funds.
The IMF’s latest Governance and Corruption Diagnosis Assessment notes that despite decades of engagement with Pakistan’s finance authorities, fiscal controls remain fragile. It said major gaps in the Single Treasury Account (TSA) allow government cash to remain scattered across various accounts, creating idle funds and raising transparency concerns over which entities earn interest on deposits held in commercial banks.
Adding to this, several phases of Pakistan’s expenditure process still operate manually and outside the Financial Accounting and Budgeting System, leaving room for mismanagement. Parliamentary oversight has grown weaker too, with the National Assembly recently approving Rs9.4 trillion in expenditure overruns, a sharp rise from last year.
The report also pointed to fragmentation in debt management, with responsibilities split across multiple entities, slowing coordination and delaying critical decisions. The absence of a fully functional Cash Forecasting Unit and irregular sessions of the Cash Coordination Committee have added pressure to borrowing and liquidity operations.
Quoting the IMF report,
“Persistent gaps between policy and practice open avenues for the misuse of public authority,” stressing that fiscal vulnerabilities stem from weak accountability structures and slow reform implementation.
Public investment remains affected by inconsistent funding, political influence through constituency development funds, and delays pushing project costs higher than planned. The IMF urged Pakistan to take corrective steps within three to six months, including improving cash forecasting tools, expanding TSA coverage, and strengthening institutional oversight to restore budget credibility.
