IMF slaps 64 conditions on Pakistan for $7 billion bailout package, can it meet them?
Pakistan’s IMF bailout package comes with 64 conditions, including new taxes, subsidy cuts and anti-corruption measures, after Shehbaz Sharif’s government failed to meet key economic targets.
The International Monetary Fund (IMF) imposed new conditions on Pakistan. (Representative Picture)
There is no free lunch. No one understands this better than Pakistan, which was slapped with 64 conditions for the International Monetary Fund’s (IMF) long-awaited $7 billion bailout package. A few days after approving the new $1.2 billion tranche, the IMF announced 11 new conditions added to the loan. All 64 conditions must be met within 18 months. Having missed 11 indicators, Shehbaz Sharif’s government agreed to comply with the new targets. These include additional tax measures, spending cuts, rising revenue deficits and keeping the Extended Funding Facility (EFF) on track.
Pakistan IMF Loan
According to ‘Dawn’, the Pakistani government has acknowledged an estimated shortfall arising from the poor performance of captive power tax of Rs 104 billion. He assured the international organization to close the gap by cutting electricity subsidies. After the Federal Board of Revenue missed its collection target by Rs 430 billion, Finance Minister Muhammad Aurangzeb assured the IMF that it would offset some of it by imposing a new GST rate of 18%. He said: “If FBR’s revenues continue to fall short of expectations in the second quarter of FY26 (end of this month) and other tax revenues remain insufficient to bridge the gap, we will, in consultation with IMF staff, increase the federal excise duty (FED) on fertilizers and pesticides by five percentage points, impose FED on high-value sugary products and move products from the 8th GST scheme to the general GST regime.”
(Pakistan’s Shehbaz Sharif government missed some IMF conditions.)
IMF 64 conditions for Pakistan loan
He added: “If a revenue shortfall arises due to the implementation of the National Tariff Policy at the end of the second quarter of FY26, we will defer the equivalent amount of expenditure until the last quarter of FY26.” The government missed one of six qualitative performance benchmarks, five structural benchmarks and four indicator targets. Some of these were later met or extended beyond their original deadlines.
Pakistan’s economic crisis
The IMF’s imposition of new conditions on Pakistan shows that corruption in the system has become widespread. Demanded Islamabad to declare assets of senior federal officials; This can be extended to state officials. This requirement must be met within one year. The cash-strapped country was also asked to fight corruption in 10 high-risk departments and strengthen anti-corruption units in the state. He asked him to present an action plan on how to achieve the goal. Pakistan also needs to complete a comprehensive assessment of remittance costs and cross-border payment barriers. The IMF has asked the South Asian economy to formulate a strategy for local currency bond market reforms.
