Pakistan Misses IMF Health & Education Spending Target by $93 Million

Provincial Shortfalls Hamper Progress Despite Federal Overachievement

Pakistan has failed to meet a critical International Monetary Fund (IMF) spending benchmark for health and education, falling short by Rs27 billion (approximately $93 million USD) in the last fiscal year.

Education Spending Lagging

Education appears to be a low priority, with one in four children out of school and half of grade-five students unable to read basic Urdu stories. The combined spending by federal and provincial governments reached Rs2.84 trillion against a target of Rs2.863 trillion.

Provincial Discrepancies Emerge

While the federal government and Balochistan exceeded their commitments, Sindh, Khyber-Pakhtunkhwa (K-P), and Punjab significantly missed their allocated targets. Poor administrative structures and low absorption capacity were cited as primary reasons for these shortfalls.

The IMF had established quarterly and annual spending ceilings to prevent social sector investments from being neglected in favor of fiscal targets. Despite authorities assuring the IMF of efforts to boost provincial capacity in May, the IMF’s staff report indicated a decline in health and education spending since 2018.

Late Surge Fails to Offset Deficit

The annual target was missed even with a substantial spending increase in the final quarter. The five governments collectively spent Rs937 billion in April-June, exceeding the quarterly target of Rs713 billion by nearly a third. However, this late surge could not compensate for deficits accumulated in the preceding three quarters.

Authorities had previously acknowledged the downturn in non-Benazir Income Support Programme (BISP) health and education expenditure, pledging gradual increases as a percentage of GDP throughout the IMF program.

Punjab and Sindh Show Significant Gaps

The federal government exceeded its internal target, spending Rs261 billion on health and education against a Rs248 billion allocation. Punjab, however, spent Rs1.15 trillion, falling Rs35 billion short of its internal goal. Provincial Information Minister **Azma Bukhari** stated Punjab’s health expenditure was 96% of its target, with education spending at 98%.

Sindh’s government, led by Chief Minister **Syed Murad Ali Shah**, recorded a Rs153 billion deficit against its Rs853 billion target, spending Rs670 billion. This shortfall is attributed by sources to a tendency for provincial governments to favor more visible infrastructure projects over social spending.

Khyber-Pakhtunkhwa spent Rs545 billion, missing its Rs600 billion target by Rs55 billion. Balochistan, conversely, overachieved by Rs25 billion, spending Rs206 billion.

Education Crisis Persists

A recent World Bank report highlights Pakistan’s ongoing struggles with equitable educational access, noting significant disparities across educational levels and genders. While the gross intake ratio in grade one is 91%, with male and female disparities present, transition rates are generally positive.

However, the gross enrollment rate plummets from 78% in primary education to just 22% in higher secondary education, underscoring retention challenges. The number of out-of-school children remains alarming, with 26.1 million, or 38% of the school-age population, not attending school in 2022-23. Rural areas account for 74% of these children, with girls facing critical access barriers.

Learning outcomes have also shown a worrying decline. National assessments revealed that only 50% of grade-five students could read a grade-two Urdu or Sindhi story in 2023, a drop from 55% in 2021. English literacy and numeracy skills also deteriorated.

Health Sector Faces Similar Challenges

Similarly, World Bank data on health sector loans indicates a concerning trend. Despite overall improvements in health outcomes over the past decade, Pakistan is unlikely to meet most 2030 health-related Sustainable Development Goals (SDGs) at its current pace. Life expectancy, though improved, remains low for South Asia, and progress in maternal and child health is insufficient.