IMF Tightens the Screws on Pakistan: 11 New Conditions Added to $7 Billion Bailout, Total Conditions Rise to 64

The International Monetary Fund (IMF) has placed 11 fresh conditions before Pakistan under the second review of its $7 billion bailout package, making it clear that further disbursement of funds will depend strictly on compliance with these requirements.

With the addition of these new benchmarks, the total number of IMF conditions imposed on Pakistan has risen to 64 within just 18 months.

The IMF says these conditions are necessary to curb corruption, liberalise the sugar sector, reduce soaring remittance costs, reform taxation and fix deep-rooted structural weaknesses that continue to obstruct Pakistan’s economic recovery.

The IMF is now exerting intensified pressure on Islamabad, signalling growing dissatisfaction with the pace and quality of reforms. Here is a detailed look at the 11 new conditions imposed by the IMF:

The 11 New IMF Conditions for Pakistan

1. Public Disclosure of Assets
   By December 2025, asset declarations of senior federal civil servants must be made public. This requirement will later be extended to the provincial level.
2. Anti-Corruption Action Plans
   Action plans must be formulated to tackle corruption in 10 high-risk government departments.
3. Stronger Provincial Anti-Corruption Units
   Provincial anti-corruption units must be strengthened and granted access to financial intelligence data.
4. Assessment of Remittance Costs
   A comprehensive assessment of remittance costs and barriers to cross-border payments must be completed by May 2025.
5. Local Currency Bond Market Reforms
   A detailed study and reform strategy for the local currency bond market must be prepared by September 2025.
6. Sugar Sector Liberalisation Policy
   To eliminate elite capture, a national sugar market liberalisation policy must be finalised by June 2025.
7. Comprehensive FBR Reform Roadmap
   By December 2025, Pakistan must finalise a detailed Federal Board of Revenue (FBR) reform roadmap, including key performance indicators (KPIs) and full implementation across at least three priority areas.
8. Medium-Term Tax Reform Strategy
   A medium-term tax reform strategy must be completed by December 2025.
9. Private Sector Participation in Power Utilities
   Preconditions must be finalised for private-sector participation in power distribution companies HESCO and SEPCO, along with the signing of Public Service Obligation (PSO) agreements.
10. Corporate and SEZ Law Reforms
    Amendments to the Companies Act and reforms to the Special Economic Zones (SEZ) Act must be introduced.
11. Mini-Budget Clause
    Pakistan must formally agree to present a mini-budget next year if government revenues fall short of targets.

According to the IMF, these measures are critical to improving governance, reducing losses in the power sector, strengthening tax administration, and addressing structural inefficiencies that have consistently derailed Pakistan’s economic reforms.

Major Conditions on the Sugar Sector

One of the most significant demands relates to reforming Pakistan’s sugar industry, which the IMF believes is dominated by entrenched elites. By June 2026, Pakistan must implement several reforms, including:

• Formulating a national sugar market liberalisation policy
• Reaching consensus on reforms related to licensing, price controls, import and export permissions, and zoning regulations

The IMF’s goal is to dismantle monopolistic control and promote transparency and competition in the sector.

Major Reforms in the Financial Sector

Pakistan has been directed to complete an assessment of remittance costs and structural barriers to cross-border payments by May 2026, amid estimates that remittance-related expenses could rise to $1.5 billion.

Additionally, a separate study on obstacles to the development of the local currency bond market must be completed by September 2026, followed by the formulation of a strategic action plan.

Overhaul of the Tax System

Persistent underperformance by the Federal Board of Revenue (FBR) has triggered another round of reforms. By December 2025, Pakistan must:

• Finalise a detailed FBR reform roadmap
• Identify staffing needs and key reform milestones
• Assess revenue impacts
• Define clear KPIs
• Fully implement reforms in at least three priority areas, including legal and personnel changes.

Power Sector and Corporate Governance Reforms

To curb chronic losses in the power sector, the IMF has mandated that by December 2025:

• Conditions for private sector participation in HESCO and SEPCO must be finalised
• Public Service Obligation (PSO) agreements must be signed with the seven largest power entities before the next federal budget.t
• Amendments must be introduced to the Companies Act, 2017, to modernise corporate governance and compliance for unlisted companies.s

IMF Signals Growing Pressure on Pakistan

The inclusion of 11 additional conditions strongly suggests that the IMF views Pakistan’s reform progress as uneven and insufficient.

As a result, the Fund has tightened oversight and increased pressure on Pakistani authorities before releasing further financial assistance.

This latest move underscores the IMF’s insistence on deep structural reforms, even as Pakistan continues to struggle with fiscal stress, weak governance, and political challenges.

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