IMF slaps 11 new conditions on Pakistan against its billion-dollar bailout scheme

Global financial agency, the International Monetary Fund (IMF), has imposed 11 fresh sets of conditions on Pakistan in exchange for the billion-dollar bailout programme, according to local Pakistani news portal Express Tribune's report on 18 May 2025. 

The official IMF review report on Pakistan highlights that the bailout plan will immediately disburse nearly $1 billion, bringing the total amount disbursed to nearly $2.1 billion.

“This decision allows for an immediate disbursement of around $1 billion (SDR 760 million), bringing total disbursements under the arrangement to about $2.1 billion (SDR 1.52 billion),” said the IMF in its official report.

According to official data, the IMF also approved the Pakistani authorities' request to arrange another $1.4 billion under the Resilience and Sustainability Facility (RSF). 

The IMF said that “rising tensions between India and Pakistan, if sustained or deteriorate further, could heighten risks to fiscal, external and reform goals of the programme,” according to the news portal's report.

Here are the 11 new conditions imposed on Pakistan

1. Approval of the ₹17.6 trillion budget: The IMF has imposed that Pakistan must pass a new federal budget for the financial year 2025-26, which is in line with the IMF targets by June 2025.

According to the news report, the ₹17.6 trillion budget will include ₹1.07 trillion for developmental spending. The IMF also shows interest in spending ₹8.7 trillion, the primary budget surplus of ₹2.1 trillion, and the overall deficit of ₹6.6 trillion.

2. Agricultural Income Tax reforms: The international body also imposed another condition where four units will be implemented through the Agricultural Income Tax laws.

The comprehensive plan includes the establishment of an operational platform for processing returns, taxpayer identification and registration, a communication campaign, and a compliance improvement plan. The deadline for the same in June 2025, according to the news portal's report. 

3. Governance Action plan: The Pakistan government is directed to publish a governance action plan based on the recommendations from the IMF's Governance Diagnostic Assessment to identify reform measures.

4. Maintain real purchasing power: To maintain the real purchasing power of the people of the nation, IMF has directed Pakistan to give annual inflation adjustment of the unconditional cash transfer programme.

5. Post-2027 financial sector strategy: The government has also been directed to make and publish a plan to outline the post-2027 financial sector strategy to highlight the regulatory environment from 2028 onwards, according to the local news portal's report.

6. Electricity Tariff: The government of Pakistan will issue a notification of the annual electricity tariff rebasing by 1 July 2025 to maintain energy tariffs at cost recovery levels.

7. Semi-annual Gas Tariff: The IMF also directed the government to issue a notification on semi-annual gas tariffs to maintain the energy tariffs at cost recovery levels by February 15, 2026. 

8. Power Levy: The nation's parliament will also adopt legislation to permanently establish the captive power levy ordinance by the end of May 2025. This aims to shift industrial energy usage to the national grid.

9. Remove cap on debt service surcharge: Pakistan will also adopt a law to remove the maximum ₹3.21 per unit cap on debt service surcharge, which is to punish honest electricity consumers to pay for inefficiency in the power sector, as per the news portal's report.

10. Special Technology Zones: Pakistan will also prepare a plan based on the assessment conducted to fully phase out all incentives in relation to Special Technology Zones and other industrial parts by 2035.

11. Used-car import: As part of the condition, Pakistan also has to submit a bill for listing all quantitative restrictions on used motor vehicle imports, which are less than five years old by end of July 2025.

According to the news portal's report, vehicles up to three years old can currently be imported into the nation.