Good news is on the way for government employees in Pakistan! In a major development, the International Monetary Fund (IMF) has agreed to a 10% salary increase based on basic pay for government workers in the upcoming Budget 2025-26. This move comes after continuous discussions between the Pakistani government and the IMF as part of the financial planning for the new fiscal year.
According to recent updates, the IMF has conditionally approved this salary increase, showing some flexibility in its usual tight budget recommendations. The IMF typically urges the government to cut down expenses, but this time it’s supporting a modest raise for the public sector workers. This relief is seen as a necessary step, especially at a time when inflation has pushed the cost of living to new heights.
The budget is set to be officially presented on June 10, 2025, and government employees across the country are eagerly waiting for its final announcements. The proposed 10% increase, while appreciated, is being considered insufficient by many. Employees are demanding a minimum 50% increase, pointing out that the current economic conditions make it hard for them to meet basic living expenses.
From house rents to utility bills, and transportation costs to medical care—everything has become more expensive. A 10% raise in basic pay, they argue, will hardly make a dent in their monthly financial burden. Many employees have also asked the government to review and increase their House Rent Allowance (HRA), Conveyance Allowance (CA), and Medical Allowance to reflect the present-day cost of living.
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In addition to the salary increase, there’s also positive news about tax relief. The government is planning to reduce income tax burdens on salaried individuals. Teachers, in particular, may benefit from a 25% tax exemption, which would offer much-needed breathing space for those in the education sector.
While nothing is finalized yet, the talks between the IMF and the government are ongoing. If the government can find other sources of revenue, there’s a possibility of further relief for employees. For now, the 10% increase is a hopeful sign that better support may be coming for Pakistan’s hardworking government staff.
Stay tuned for the final budget announcement—it could bring more surprises!