Pakistan is contemplating raising its retirement age to curb growing pension payments ahead of the annual budget presentation and an upcoming International Monetary Fund (IMF) mission visit, as announced by the country’s finance minister on Tuesday.
Finance Minister Muhammad Aurangzeb disclosed that an IMF mission is expected to arrive in Pakistan within the next 10 days to discuss a potential new bailout program.
While Pakistan recently concluded a short-term $3 billion program, averting sovereign default, the government under Prime Minister Shehbaz Sharif emphasizes the necessity for a longer-term arrangement.
The finance minister emphasized the urgency to rein in pension costs, describing them as a substantial liability. Currently, the retirement age in Pakistan stands at 60.
“Aurangzeb emphasized that age is now just a number, stating ‘Sixty is the new 40,'” indicating the government’s consideration for increasing the retirement age.
In the fiscal year 2023-24, Pakistan allocated 801 billion rupees ($2.88 billion) for superannuation allowances and pensions, marking a 31% increase from the previous fiscal year.
With Pakistan’s financial year ending in June and the budget for fiscal year 2025 due before June 30th, the IMF stated, “A mission is expected to visit Pakistan in May to discuss the FY25 budget, policies, and reforms under a potential new program for the welfare of all Pakistanis.”
However, the dates of the visit, as well as the specifics regarding the program’s size and duration, were not disclosed by the IMF or the finance minister.
