11 new demands added in the latest staff-level agreement cover SEZ tax reforms, energy pricing, budget approval, FBR audits & a higher BISP stipend.
Key Takeaways:
- Pakistan has accepted 11 new IMF conditions, pushing the cumulative total to 75 since the $7 billion programme began less than two years ago.
- Key new demands include phasing out SEZ and tech zone tax incentives by 2035, banning export zone firms from local sales, and mandatory parliamentary budget approval aligned with IMF targets.
- BISP beneficiaries will see quarterly payments rise from Rs14,500 to Rs19,500 from January 2027, while the fourth IMF tranche of $1 billion is expected in early May.
Karachi, Pakistan – Pakistan’s $7 billion IMF bailout has grown significantly more complex, with the fund attaching 11 new conditions to the recently concluded staff-level agreement — bringing the total number of structural demands imposed in under two years to 75.
A news story published by The Express Tribune revealed that with these additions, the total number of conditions imposed during the past less than two years has reached 75, encompassing all spheres of economic decision-making, governance and private sector development.
Out of the $7 billion, the IMF has so far disbursed $3 billion, with the fourth tranche of $1 billion expected in the first week of May.
Among the most consequential new conditions, by June 2027, Pakistan will enact amendments to the Special Economic Zones Act and the Special Technology Zones Authority Act to phase out existing fiscal incentives and shift from profit-based to cost-based incentives, with all existing fiscal incentives to be completely phased out by 2035. Additionally, export processing zones will be prohibited from selling their goods in the domestic market — a restriction to be implemented by September this year.
On budget governance, the government has committed that parliament would approve the fiscal year 2026-27 budget in line with the IMF staff agreement — the second time such a condition has been accepted under the current programme.
Energy pricing conditions have also been reinforced. Pakistan has accepted new conditions requiring timely notifications of quarterly tariff adjustments and automatic monthly fuel charge adjustments, with full annual electricity price implementation by January 2027 and semi-annual gas tariff adjustments in line with cost recovery.
To cushion consumers from the impact of higher prices, BISP beneficiaries’ quarterly payments will increase from Rs14,500 to Rs19,500 beginning January 2027, covering projected inflation and bringing benefits closer to 15 percent of the lowest income quintile’s consumption basket.
Out of the $7 billion, the IMF has so far disbursed $3 billion, with the fourth tranche of $1 billion expected in the first week of May.
Disclaimer
This report is for informational purposes and does not necessarily reflect the views of ‘Money Matters Pakistan’. We welcome any corrections or alternative viewpoints from our readers to ensure a balanced perspective.
