IMF set 11 new conditions for Pakistan’s $7 billion bailout. Details here

The International Monetary Fund (IMF) has attached 11 new conditions to Pakistan’s $7 billion bailout programme, taking the total number of conditions under the facility to 75 over the past two years, according to a latest report. The latest requirements span fiscal policy, governance reforms and private sector regulation. Among the key conditions, Pakistan has committed that its Parliament will approve the 2026–27 budget in line with the IMF programme targets. This marks the second consecutive year that the country’s federal budget will be passed under IMF guidance.

The development came as the State Bank of Pakistan confirmed it had received $1 billion from Saudi Arabia’s finance ministry on April 20, providing short-term support to the country’s foreign exchange reserves.

Government officials told The Express Tribune that the staff-level agreement reached last month was contingent upon Islamabad accepting additional conditions during the programme’s third review. So far, the IMF has disbursed $3 billion, with a fourth tranche of $1 billion expected in early May, pending board approval.

As part of structural reforms, Pakistan has agreed to amend laws governing Special Economic Zones and Special Technology Zones by June 2027. These changes aim to phase out existing fiscal incentives and transition towards cost-based incentives. Authorities have also pledged to eliminate all such incentives by 2035, subject to IMF satisfaction.

Further commitments include prohibiting Export Processing Zones from selling goods in the domestic market by September this year, a move intended to curb tax evasion. The government has also assured the IMF it will not introduce new zones until ongoing negotiations conclude.

Finance Minister Muhammad Aurangzeb reportedly assured IMF officials during talks in Washington that Pakistan would pursue a fiscally consolidated budget and avoid targeting aggressive economic growth in the next fiscal year.

In the energy sector, Islamabad has accepted new conditions mandating regular adjustments to electricity and gas tariffs. These include quarterly tariff adjustments and monthly fuel cost revisions, along with semiannual gas price updates to ensure cost recovery, as determined by regulators.

The IMF has also pushed for reforms in taxation and governance. The Federal Board of Revenue will centralise audit case selection and implement a standardised audit policy by June. Meanwhile, procurement rules will be amended by September to remove preferential treatment for state-owned enterprises in public contracts. To mitigate the impact of rising energy costs and taxation, Pakistan has agreed to increase payments under the Benazir Income Support Programme from ₹14,500 to ₹19,500 starting January 2027.

Additionally, the government will establish a Pakistan Regulatory Registry by June next year to streamline business regulations and improve the investment climate. The IMF is also urging a gradual easing of foreign exchange restrictions through a phased roadmap.