Islamabad:
The International Monetary Fund (IMF) slapped 11 new conditions on Pakistan, in particular the approval of a new budget of 17.6 Billions of Rupes, increasing the supplement of debt service on electricity bills and the lifting of restrictions on the importation of more than three years used.
The staff level report, which the IMF published on Saturday, also said that “the rise in tensions between India and Pakistan, if it was supported or deteriorate further, could increase risks for tax, external and program reform objectives”.
The report has also indicated that tensions between Pakistan and India have increased considerably in the past two weeks, but so far, the market reaction has been modest with the stock market keeping most of its recent earnings and recent differences.
The IMF has shown the defense budget for the next exercise at RS2.414 Billions, which is higher by 252 billion rupees or 12%. Compared to the projection of the IMF, the government indicated the allowance of more than 2.5 billions of rupees or 18% budget after the bare assault of India.
The report revealed that the IMF had slapped 11 other conditions on Pakistan for loans at only $ 7 billion, bringing total conditions to 50.
He imposed a new condition for obtaining “parliamentary approval of the budget for the financial year 2026 in accordance with the IMF staff agreement to achieve the program’s objectives by the end of June 2025”.
The IMF showed the total size of the federal budget at Rs17.6 Billions, including 1.07 Billion of rupees for development spending. L’Express PK Press Club had reported a few days ago that the government would present more than RS17.5 budget.
The IMF has shown interest expenses at 8.7 rumbox, the main surplus of the budget at Rs 2.1 Billions and the overall deficit at 6.6 Billions of Rupes.
A new condition has also been imposed on the provinces where the four federative units will implement the new tax laws on agriculture income thanks to a full plan, in particular the creation of an operational platform for the processing of yields, the identification and registration of taxpayers, a communication campaign and a compliance improvement plan. The deadline for the provinces is June of this year.
According to the third new condition, the government will publish a governance action plan based on the recommendations of the diagnostic evaluation of governance by the IMF. The report of the report is to publicly identify reform measures to combat critical governance vulnerabilities.
The fourth new condition stipulates that the government will give an annual adjustment of the inflation of the unconditional cash transfer program to maintain real persons from the real purchasing power
Another new condition stipulates that the government will prepare and publish a plan describing the government’s post-2017 financial sector strategy, describing the institutional and regulatory environment from 2028.
In the energy sector, four new conditions have been introduced. The Government will issue notifications from the annual electricity rate to reburate by July 1 of this year to maintain energy prices at cost recovery levels.
It will also issue the notification of the semi-annual adjustment of gas prices to maintain the energy prices at cost recovery levels before February 15, 2026, according to the report.
Parliament will also adopt legislation to make permanent permanent permanent by the end of this month, according to the IMF. The government has increased the cost of industries to force them to move to the national electricity network.
Parliament will also adopt legislation to remove the maximum of RS3.21 per ceiling unit on the overload of debt service, which is equivalent to punishing honest electricity consumers to pay the ineffectiveness of the electricity sector. The IMF and the World Bank have dictated that erroneous energy policies cause the accumulation of circular debt in addition to poor government governance. The deadline to remove the ceiling is at the end of June, according to the report.
The IMF also imposed a condition that Pakistan is preparing a plan based on the evaluation carried out to fully eliminate all incentives in relation to special technological areas and other parks and industrial zones by 2035. The report must be prepared by the end of this year.
In a friendly condition, the IMF asked Pakistan to submit to Parliament, any required to raise all quantitative restrictions on the commercial import of used motor vehicles (initially only for vehicles under five years in late July.
Currently, only three -year -old cars can be imported and there are many non -pricing obstacles to discourage importation. The purpose of the lifting of these restrictions is the liberalization of trade and the increase in the affordability of vehicles, the IMF said.
In addition to imposing new conditions, the IMF also made adjustments under the previous conditions.
Implementation of the program
The IMF has extended the deadlines for four conditions, the implementation of which had been delayed. The lender said that the government met the seven quantitative performance criteria for the end of December 2024. These were soils on net international SBP reserves; Transfer expenses in targeted cash; The number of new declarations of income for new declarants, the ceilings on net interior assets of the SBP; SBP FX Swaps; the primary budget deficit of the general government; and government guarantees.
The majority of indicative objectives were achieved at the end of December, including the ceilings on the global provincial primary budgetary deficit; Net accumulation of tax reimbursement arrears; and payment arrears from the energy sector; the floors on income received by provincial authorities on revenue; And weighted average maturity of local money securities. However, government health conditions and education spending; Net tax revenues collected by FBR; And the net tax revenues collected from retailers of the Tajir Dost regime were missed, the IMF said.
The respective governments also met nine structural benchmarks, in particular by approving a national tax pact, improving the guarantees of monetary policy operations and the approval of modifications to the banking resolution and the deposit of the legislation.
However, the structural reference on provincial agricultural income tax legislation was not fulfilled at the end of October, but this legislation was adopted later in February 2025. Two other structural references were missed due to delays in the modifications adopted to civil servants and acts of sovereign funds (SWF).
Two SBS relating to the resolution of sub-capitalized banks and producers of captivity power have been missed, but subsequent political actions should achieve the underlying objectives, the IMF said.
