IMF imposes 11 new conditions on Pakistan for $7b loan

The International Monetary Fund (IMF) has introduced 11 additional conditions for Pakistan under its ongoing loan program, raising the total to 50.

The new stipulations are part of the agreement tied to a $7 billion financial package and are aimed at fiscal consolidation, structural reforms, and economic transparency.

According to the IMF’s staff-level report released Saturday, key conditions include the approval of a Rs17.6 trillion federal budget for FY2025-26, increasing the debt servicing surcharge on electricity, and lifting restrictions on importing used cars older than three years.

The report highlighted that defense spending would rise to over Rs2.5 trillion, driven in part by heightened tensions with India.

The IMF also called for reforms in provincial agricultural income taxation, publication of a governance reform plan, and adjustments to social safety programs for inflation. In the energy sector, the government must revise electricity and gas tariffs and legislate the permanent implementation of the captive power levy and the removal of the surcharge cap.

Additionally, Pakistan must submit legislation to ease restrictions on used car imports and phase out tax incentives in industrial zones by 2035. The IMF warned that escalating regional tensions could threaten Pakistan’s economic reform goals