Pakistan has failed to meet the International Monetary Fund’s (IMF) target for annual social sector spending, missing the mark by Rs27 billion despite urgent needs in healthcare and education.
Under the IMF agreement, the federal and provincial governments were to spend Rs2.863 trillion on health and education in the last fiscal year. Actual spending came to Rs2.84 trillion, government data shows. The shortfall reflects a deeper challenge: provinces often prioritise large infrastructure projects with higher political visibility over long-term social development.
Compared to commitments made in provincial and federal MOUs, the gap was even wider — Rs240 billion less than promised. Sindh missed by Rs153 billion, Khyber-Pakhtunkhwa by Rs55 billion, and Punjab by Rs35 billion. In contrast, the federal government and Balochistan exceeded their targets.
The IMF has repeatedly stressed that social spending must not be compromised for fiscal targets like cash surpluses and budget balances. However, poor governance and weak project execution in provinces continue to limit progress.
Education indicators are particularly alarming. According to the World Bank, 26.1 million children — 38% of school-age youth — are out of school. Girls and rural communities face the greatest barriers. Foundational learning is also declining, with only half of grade-five students able to read a grade-two level Urdu or Sindhi story in 2023, down from 55% in 2021.
On the health front, Pakistan has made some gains, such as better life expectancy, but is lagging on most 2030 Sustainable Development Goals. Maternal and child health progress remains inadequate, and the country is still one of only two where polio is endemic.
The IMF’s staff report confirms that without stronger provincial capacity and a sustained increase in health and education budgets, Pakistan risks falling further behind in human development.