IMF Reforms Are Not New Conditions for Pakistan: Finance Ministry

The Ministry of Finance has issued a statement clarifying that the latest structural benchmarks under Pakistan’s IMF Extended Fund Facility (EFF) are not abrupt or externally imposed, but rather a continuation and deepening of the government’s own medium-term reform agenda. Responding to recent commentary about so-called “new conditions” attached to the IMF program, the ministry emphasized that the measures referenced are part of a phased, sequenced approach agreed with the IMF, building on reforms already initiated by the government. Each review of the EFF, the ministry explained, builds upon prior actions to ensure the achievement of policy goals set at the program’s outset. The ministry detailed that many of the structural benchmarks and actions included in the latest Memorandum of Economic and Financial Policies (MEFP) are logical progressions of earlier reforms. For example, the public disclosure of asset declarations for civil servants, strengthening the National Accountability Bureau (NAB), and empowering provincial anti-corruption bodies are all extensions of commitments made in previous reviews. Other measures, such as facilitating foreign remittances, developing the local currency bond market, and deregulating the sugar industry, were described as government-led initiatives that have now been formalized as structural benchmarks due to their alignment with EFF objectives. The ministry also highlighted the comprehensive reform roadmap for the Federal Board of Revenue (FBR), the medium-term tax reform strategy, and the phased privatization of power distribution companies (DISCOs) as ongoing efforts that predate the latest IMF review. Amendments to the Companies Act, 2017, and proposed changes to the Special Economic Zones (SEZ) Act were also cited as part of a broader regulatory reform agenda aimed at improving the business climate. Contingency measures for revenue shortfalls, such as the introduction of a 5 percent Federal Excise Duty on fertilizer and pesticides, have been part of the MEFP framework since May 2024. The finance ministry concluded that the latest measures represent continuity and sequencing of Pakistan’s agreed reform agenda under the IMF program, rather than the imposition of sudden or unprecedented conditions. The statement reaffirmed the government’s commitment to implementing these reforms in a structured and transparent manner to achieve sustainable economic growth and stability.