IMF imposes 11 new circumstances on Pakistan, warns it towards dangers to bailout programme: Report

The Worldwide Financial Fund (IMF) has slapped 11 new circumstances on Pakistan for the discharge of the subsequent tranche of its bailout programme and warned that tensions with India may heighten dangers to the scheme’s fiscal, exterior, and reform targets, in keeping with a media report on Sunday, Might 18, 2025.
| Photograph Credit score: Reuters

The Worldwide Financial Fund (IMF) has slapped 11 new circumstances on Pakistan for the discharge of the subsequent tranche of its bailout programme and warned that tensions with India may heighten dangers to the scheme’s fiscal, exterior, and reform targets, in keeping with a media report on Sunday (Might 18, 2025).

The brand new circumstances imposed on Pakistan embrace the parliamentary approval of a brand 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 automobiles.

The Specific Tribune newspaper mentioned the Workers Degree report, which the IMF launched on Saturday (Might 18, 2025), additionally mentioned that “rising tensions between India and Pakistan, if sustained or deteriorate additional, may heighten dangers to the fiscal, exterior and reform targets of the programme”.

The report additional said that tensions between Pakistan and India have risen considerably over the previous two weeks, however to date, 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 subsequent fiscal 12 months at ₹2.414 trillion, which is larger by ₹252 billion or 12%.

In comparison with the IMF’s projection, the federal government has indicated allocating over ₹2.5 trillion or an 18% larger funds, after confrontation with India early this month.

India carried out precision strikes beneath ‘Operation Sindoor’ on terror infrastructure early on Might 7 in response to the April 22 Pahalgam terror assault that killed 26 individuals.

India and Pakistan reached an understanding on Might 10 to finish the battle after 4 days of intense cross-border drone and missile strikes.

The Specific Tribune report mentioned that the IMF slapped 11 extra circumstances on Pakistan, taking the full circumstances to 50.

It has imposed the brand new situation of securing “parliamentary approval of the fiscal 12 months 2026 funds in keeping with the IMF workers settlement to fulfill programme targets by end-June 2025”.

The IMF report has proven the full measurement of the federal funds at ₹17.6 trillion, together with ₹1.07 trillion for improvement spending.

A brand new situation has additionally been imposed on the provinces the place the 4 federating models will implement the brand new Agriculture Revenue 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.

Based on the third new situation, the federal government will publish a governance motion plan primarily based on the suggestions of the Governance Diagnostic Evaluation by the IMF.

The aim of the report is to publicly determine reform measures to deal with crucial governance vulnerabilities.

One other 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.

Within the power sector, 4 new circumstances have been launched. The federal government will concern notifications of the annual electrical energy tariff rebasing by July 1st of this 12 months to take care of power tariffs at price restoration ranges.

It would additionally concern a notification of the semi-annual gasoline tariff adjustment to take care of power tariffs at price restoration ranges by February 15, 2026, in keeping with the report.

Parliament may even undertake laws to make the captive energy levy ordinance everlasting by the top of this month, in keeping with the IMF. The federal government has elevated the price for the industries to power them to shift to the nationwide electrical energy grid.

Parliament may 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 customers to pay for the inefficiency of the facility sector.

The IMF and the World Financial institution dictated that fallacious power insurance policies are inflicting the buildup of the round debt along with the federal government’s dangerous governance. The deadline to take away the cap is the top of June, in keeping with the report.

The IMF has additionally imposed a situation that Pakistan will put together a plan primarily based on the evaluation carried out to completely part out all incentives in relation to Particular Know-how Zones and different industrial parks and zones by 2035. The report needs to be ready by the top of this 12 months.

Lastly, in a consumer-friendly situation, the IMF has requested Pakistan to undergo the Parliament all required laws for lifting all quantitative restrictions on the business importation of used motor autos (initially just for autos lower than 5 years previous by the top of July. At the moment, solely automobiles as much as three years previous may be imported.