The International Monetary Fund (IMF) has slapped 11 new conditions on Pakistan for the discharge of the following tranche of its bailout programme and warned that tensions with India may heighten risks to the scheme’s fiscal, exterior, and reform targets, in accordance to a media report on Sunday (May 18, 2025).
The new conditions imposed on Pakistan embody the parliamentary approval of a new ₹17.6 trillion funds, a rise within the debt servicing surcharge on electrical energy payments and lifting restrictions on import of greater than three-year-old used vehicles.
The Express Tribune newspaper mentioned the Staff Level report, which the IMF launched on Saturday (May 18, 2025), additionally mentioned 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 report additional said that tensions between Pakistan and India have risen considerably over the previous two weeks, however thus far, the market response has been modest, with the inventory market retaining most of its latest beneficial properties and spreads widening reasonably.
The IMF report has proven the defence funds for the following fiscal 12 months at ₹2.414 trillion, which is increased by ₹252 billion or 12%.
Compared to the IMF’s projection, the federal government has indicated allocating over ₹2.5 trillion or an 18% increased funds, after confrontation with India early this month.
India carried out precision strikes underneath ‘Operation Sindoor’ on terror infrastructure early on May 7 in response to the April 22 Pahalgam terror assault that killed 26 individuals.
India and Pakistan reached an understanding on May 10 to finish the battle after 4 days of intense cross-border drone and missile strikes.
The Express Tribune report mentioned that the IMF slapped 11 extra conditions on Pakistan, taking the overall conditions to 50.
It has imposed the new situation 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”.
The IMF report has proven the overall measurement of the federal funds at ₹17.6 trillion, together with ₹1.07 trillion for growth spending.
A new situation has additionally been imposed on the provinces the place the 4 federating models will implement the new Agriculture Income Tax legal guidelines via a complete plan, together with the institution of an operational platform for processing returns, taxpayer identification and registration, a communication marketing campaign, and a compliance enchancment plan.
The deadline for the provinces is June this 12 months.
According to the third new situation, the federal government will publish a governance motion plan primarily based on the suggestions of the Governance Diagnostic Assessment by the IMF.
The objective of the report is to publicly establish reform measures to tackle important governance vulnerabilities.
Another new situation states that the federal government will put together and publish a plan outlining the federal government’s post-2027 monetary sector technique, outlining the institutional and regulatory surroundings from 2028 onwards.
In the vitality sector, 4 new conditions have been launched. The authorities will challenge notifications of the annual electrical energy tariff rebasing by July 1st of this 12 months to preserve vitality tariffs at price restoration ranges.
It can even challenge a notification of the semi-annual fuel tariff adjustment to preserve vitality tariffs at price restoration ranges by February 15, 2026, in accordance to the report.
Parliament can even undertake laws to make the captive energy levy ordinance everlasting by the top of this month, in accordance to the IMF. The authorities has elevated the fee for the industries to drive them to shift to the nationwide electrical energy grid.
Parliament can even undertake laws to take away the utmost ₹3.21 per unit cap on the debt service surcharge, which is tantamount to punishing sincere electrical energy shoppers to pay for the inefficiency of the ability sector.
The IMF and the World Bank dictated that unsuitable vitality insurance policies are inflicting the buildup of the round debt as well as to the federal government’s dangerous governance. The deadline to take away the cap is the top of June, in accordance to the report.
The IMF has additionally imposed a situation that Pakistan will put together a plan primarily based on the evaluation carried out to totally part out all incentives in relation to Special Technology Zones and different industrial parks and zones by 2035. The report has to be ready by the top of this 12 months.
Finally, in a consumer-friendly situation, the IMF has requested Pakistan to submit to the Parliament all required laws for lifting all quantitative restrictions on the industrial importation of used motor automobiles (initially just for automobiles lower than 5 years previous by the top of July. Currently, solely vehicles up to three years previous could be imported.
Published – May 18, 2025 07:04 pm IST
