Government Unveils New System to Shield Economy from Financial Shocks, Fulfilling IMF Commitment

The government has delivered on another key promise made to the International Monetary Fund (IMF) by introducing a new system aimed at protecting the economy from sudden financial shocks.

The Ministry of Finance has launched a fresh monitoring framework to closely assess the financial risks linked to Public-Private Partnership (PPP) projects. This move is designed to bring hidden liabilities into the open and prevent unpleasant surprises for the national budget.

According to the ministry, PPP projects have already placed a financial burden of up to Rs472 billion on the government.

Under the new system, both federal and provincial governments will be required to submit detailed reports on PPP projects every six months, ensuring regular oversight rather than last-minute damage control.

Officials revealed that this burden includes Rs368 billion in contingent liabilities and over Rs150 billion arising from cost overruns in development projects. Financial guarantees alone account for Rs104 billion, highlighting how risks can quietly pile up without immediate visibility.

Data collected from 36 PPP projects across the country shows that Sindh carries the highest financial exposure, amounting to Rs335.6 billion. The federal government faces liabilities of Rs90.6 billion, while PPP projects in Punjab contribute Rs26.5 billion in obligations.

The Ministry of Finance clarified that these figures are provisional estimates up to December 2025 and may change as projects evolve. It also acknowledged that financial risks from PPP agreements often do not appear directly in the budget, making them easy to overlook.

Under the new framework, PPP-related risks and debts will now be formally included in fiscal reports. This step is expected to improve transparency and strengthen financial discipline.

Officials noted that common risk factors in PPP contracts include minimum revenue guarantees, interest rate fluctuations, exchange rate volatility, and rising project costs. By tracking these risks early, the government hopes to stay ahead of financial stress instead of reacting after the damage is done.

The new system signals a shift toward cautious planning and clearer accounting an effort to keep future budgets steady and the economy on firmer ground.