No new IMF conditions, reforms align with agenda: finance ministry

• The MEFP measures part of a gradual reform agenda: Ministry
• The EDF is designed to support medium-term structural reforms.
• The actions in the MEFP are derived from forms already undertaken by the government.

The finance ministry on Sunday ruled out imposing any new conditions under the International Monetary Fund’s (EFF) loan programme, saying the lender’s structural benchmarks were in line with its own reform programme.

“The measures outlined in the latest Memorandum of Economic and Financial Policies (MEFP) represent the continuation, sequencing and deepening of Pakistan’s agreed reform agenda under the Expanded Fund of the IMF, rather than the imposition of abrupt or unprecedented conditions,” the ministry said in a statement.

Clarifying the intent, context and continuity of the reform measures under the EDF and responding to the comment about the so-called “new conditionalities”, he said the said measures are part of a gradual, medium-term reform agenda agreed with the IMF, many of which are extensions or logical progressions of reforms already initiated by the government.

Noting that the EDF is designed to support countries in implementing medium-term structural reforms aimed at achieving agreed policy goals, the finance ministry emphasized that reforms are implemented sequentially and step by step during the program.

“Each review builds on previous actions to ensure that the ultimate policy objectives agreed at the start of the program are achieved.”

“Actions under the EDF are structured as logical steps, with additional measures incorporated in each successive review. The MEFP completed after the second review of the EDF complements the MEFP agreed during the First Review and reflects this step-by-step approach,” the ministry added.

The statement also shed light on the process of IMF-government talks where Islamabad is presenting its planned policy reform initiatives. When the IMF assesses that these initiatives contribute to the agreed program goals, they are incorporated into the MEFP and therefore many of the structural benchmarks and actions included in the latest MEFP are derived from reforms already undertaken or initiated by the government “rather than externally imposed or new conditions”.

The Treasury outlined further details and clarification of the ‘new conditions’ such as;

Property declarations of civil servants

This reform has been part of the EFF program since the original MEFP in May 2024.

The current structural benchmark represents the second step, following the successful legislative amendment of the Civil Servants Act, 1973.

Improving operational efficiency of Nab

Commitments to strengthen the effectiveness and independence of the National Accountability Bureau (NAB), including coordination with provincial anti-corruption institutions, were agreed during previous reviews, the ministry said.

He added that the development of action plans for high-risk organizations is a continuation of this commitment and is parallel to, rather than arising from, the Governance and Corruption Diagnostic Assessment Report.

In addition, the finance ministry said, allowing provincial anti-corruption agencies access to financial information is in line with the ongoing anti-money laundering and countering the financing of terrorism (AML/CFT) reform agenda, which has been an integral part of the EFF since its inception.

Facilitation of remittances

Boosting remittance inflows is critical to Pakistan’s external stability, he added.

“Following measures to curb informal channels, remittances grew by 26% year-on-year from 24 to 25, with a further 9.3% growth forecast for 26.”

The government, the ministry said, in coordination with the State Bank of Pakistan, is working to remove structural bottlenecks in cross-border payments. The IMF has built on these efforts by integrating them into the MEFP.

Development of the local currency bond market

The IMF staff report published in May 2025 recommended a comprehensive study to identify bottlenecks in the local currency bond market to broaden the investment base. This recommendation has now been formalized as a structural benchmark.

Deregulation of the sugar industry

The deregulation initiative comes from the government. A task force, notified by the Prime Minister’s Office and chaired by the Energy Minister, has been mandated to recommend full liberalization of the sugar market and suggest a national policy in consultation with the provinces.

Given its alignment with the EDF’s goal of reducing government intervention in commodity markets, the IMF has included this initiative as a structural benchmark.

FBR reforms

The development of a comprehensive roadmap for the Federal Board of Revenue (FBR) is part of a broader reform agenda for domestic resource mobilisation, under the direct guidance of the Prime Minister.

Key actions that have already taken place include the approval of the Transformation Plan, the establishment of a Tax Policy Office and the strengthening of Compliance Risk Management. This structural benchmark is based on the commitments made with the IMF in May 2024 and March 2025.

Medium-term tax strategy

The requirement to develop and publish a medium-term tax reform strategy is a logical extension of previous reforms, notably the establishment and operation of the Office of Tax Policy to separate tax policy formulation from the operational functions of the FBR.

Disco privatization

Privatization of distribution companies (Discos) has been a key element of the EFF program since its inception and is planned to be carried out in phases.

The finalization of the conditions for private sector participation in Hesco and SEPCO represents the next step after the start of the process for the first batch of Discos.

In addition, the signing of Public Service Obligation (PSO) agreements with the seven largest entities reiterates an earlier commitment of the program.

Regulatory reforms, corporate compliance

The 2017 amendments to the Companies Act to strengthen compliance for unlisted companies are part of the wider regulatory reform agenda to improve the business climate, a goal built into the EFF from the outset.

Similarly, the structural benchmark related to a concept note for amendments to the SEZ Act follows the successful completion of an earlier benchmark that includes an SEZ evaluation study.

Unforeseen revenue shortfalls

Contingency measures to address potential revenue shortfalls are firmly part of the MEFP framework from May 2024.

The original MEFP itself included a structural benchmark to establish a 5% federal excise tax on fertilizers and pesticides.