CityweliveThe International Monetary Fund (IMF) has imposed 11 new conditionalities on Pakistan as a prerequisite for releasing the next tranche of its bailout programme for the country’s struggling economy, according to a report by Pakistan-based Express Tribune.
A staff-level report released by the IMF on Saturday stated that “rising tensions between India and Pakistan, if sustained or further deteriorated, could heighten risks to the fiscal, external, and reform objectives of the programme.”
The IMF report, which focuses on Pakistan, also noted an increase in enterprise risks.
Among the 11 new conditions is the requirement for Pakistan to approve a new budget worth Rs 17.6 trillion for the fiscal year 2025–26, in alignment with the IMF staff agreement to meet programme targets.
On the fiscal front, another key condition mandates the implementation of new agriculture income tax laws. This includes establishing an operational platform for processing returns, identifying and registering taxpayers, launching a communication campaign, and introducing a compliance improvement plan. The deadline for this reform is set for June this year, according to the Express Tribune,
The third condition requires the Pakistani government to publish a governance action plan based on the recommendations from the IMF’s Governance Diagnostic Assessment. The purpose of this plan is to publicly outline reforms aimed at addressing key governance vulnerabilities.
Another condition stipulates that the government must adjust the unconditional cash transfer programme annually for inflation to help maintain recipients’ real purchasing power.
Additionally, the IMF has asked Pakistan to prepare and publish a long-term financial sector strategy that outlines the institutional and regulatory framework post-2027, covering the period from 2028 onwards.
In the energy sector, four new conditionalities have been introduced, although specific details were not mentioned in the report.
On the trade, investment, and deregulation front, Pakistan is required to develop a plan to phase out all incentives related to Special Technology Zones and other industrial parks by 2035, based on a comprehensive assessment.
Finally, the IMF has directed Pakistan to submit legislation to Parliament to lift all quantitative restrictions on the commercial import of used motor vehicles—initially covering vehicles less than five years old—by the end of July. This measure is intended to liberalise trade and enhance vehicle affordability.
On May 9, the IMF conducted a review of Pakistan’s USD 1 billion Extended Fund Facility (EFF) programme and also considered a new USD 1.3 billion Resilience and Sustainability Facility (RSF) lending programme.
According to reports, this latest review approval brings total disbursements under the USD 7 billion programme to USD 2 billion. (ANI)
