IMF Imposes 11 New Conditions on Pakistan for Approval of $1.2 Billion Loan Tranche

The International Monetary Fund (IMF) has introduced 11 new conditions for Pakistan to secure approval of its next $1.2 billion loan installment. These conditions require significant policy reforms and structural adjustments across multiple sectors.

Under the new requirements, Islamabad must revise Public Procurement Regulatory Authority (PPRA) rules to eliminate preferential treatment that allows state-owned enterprises (SOEs) to receive multi-billion-rupee contracts without competitive bidding.

The government has also agreed with the IMF to implement periodic energy price adjustments. Gas tariffs will be revised every six months starting July 2026, while electricity prices will be adjusted annually from January 2027. This indicates that energy costs are expected to rise during the fiscal year 2026–27.

As part of structural benchmarks, Pakistan has committed to amending laws related to Special Economic Zones (SEZs) and Special Technology Zones (STZs). These changes will gradually phase out financial incentives previously offered under these frameworks.

Further reforms include amendments to the National Accountability Bureau (NAB) ordinance and the introduction of a centralized system within the Federal Board of Revenue (FBR) for selecting audit cases. These measures will align with the Finance Bill 2026, transitioning existing profit-based incentives into a cost-based system, with all such benefits scheduled to end by 2035.

Additionally, all financial incentives provided under the China-Pakistan Economic Corridor (CPEC) will also be phased out by 2035. Amendments to PPRA regulations are expected to be finalized by September 2026 following approval of the upcoming federal budget.

The IMF Executive Board is scheduled to review Pakistan’s case next month, considering the completion of the third review under the $7 billion Extended Fund Facility (EFF) program and the release of the fourth tranche.