International Monetary Fund Imposes 11 New Conditions On Pakistan For Next Bailout Tranche
New Delhi : The International Monetary Fund (IMF) has slapped 11 new conditions on Pakistan for the release of the next tranche of its bailout programme and warned that tensions with India could heighten risks to the scheme’s fiscal, external, and reform goals.
The new conditions imposed on Pakistan include the parliamentary approval of a new Rs 17.6 trillion budget, an increase in the debt servicing surcharge on electricity bills and lifting restrictions on import of more than three-year-old used cars.The Express Tribune newspaper said the Staff Level report, which the IMF released on Saturday, also said that “rising tensions between India and Pakistan, if sustained or deteriorate further, could heighten risks to the fiscal, external and reform goals of the programme”.
The IMF report has shown the defence budget for the next fiscal year at Rs 2.414 trillion, which is higher by Rs 252 billion or 12%. Compared to the IMF’s projection, the government has indicated allocating over Rs 2.5 trillion or an 18% higher budget, after confrontation with India early this month. India and Pakistan reached an understanding on May 10 to end the conflict after four days of intense cross-border drone and missile strikes.
The Express Tribune report said that the IMF slapped 11 more conditions on Pakistan, taking the total conditions to 50. It has imposed the new condition of securing “parliamentary approval of the fiscal year 2026 budget in line with the IMF staff agreement to meet programme targets by end-June 2025”. Another new condition states that the government will prepare and publish a plan outlining the government’s post-2027 financial sector strategy, outlining the institutional and regulatory environment from 2028 onwards.
The IMF has also imposed a condition that Pakistan will prepare a plan based on the assessment conducted to fully phase out all incentives in relation to Special Technology Zones and other industrial parks and zones by 2035. The report has to be prepared by the end of this year. Finally, in a consumer-friendly condition, the IMF has asked Pakistan to submit to the Parliament all required legislation for lifting all quantitative restrictions on the commercial importation of used motor vehicles (initially only for vehicles less than five years old by the end of July. Currently, only cars up to three years old can be imported.