Pakistan funding review expected in second half of 2025 amid 11 new conditions for IMF bailout
Reuters reported citing an official statement, 'the IMF's priority remains to anchor inflation within the central bank's medium-term target range of 5–7 per cent.'
The statement further noted that the Pakistani authorities reaffirmed their commitment to fiscal consolidation while aiming for a primary surplus of 1.6 per cent of GDP in FY2026, Reuters reported.
Meanwhile, IMF staff concluded visit to Pakistan, and the statement noted that priority remains maintaining tight monetary policy to ensure inflation is anchored within the Pakistan Central Bank's medium-term target range of 7%, as reported by Reuters.
Earlier on Friday, India said it is 'thankful' for the 11 additional conditions imposed by the International Monetary Fund (IMF) on Pakistan while clarifying that it is not opposed to financial assistance meant for genuine developmental purposes.
At the same time, it raised serious concerns over the timing of the recent bailout package, suggesting that the funds may have indirectly supported Pakistan's rising defence spending.
"We are thankful for the additional 11 conditions imposed by the IMF on Pakistan. However, we are not against any financial assistance provided for genuine developmental agendas. We have raised questions regarding the timing of the recent bailout package given to Pakistan by the IMF," government sources told ANI.
The IMF staff report, released on Saturday, warned, 'Rising tensions between India and Pakistan, if sustained or deteriorate further, could heighten risks to the fiscal, external and reform goals of the programme.' It added that overall risks to the programme had increased.
According to a report by the Pakistan-based Express Tribune, the IMF has imposed 11 new conditions on Pakistan for the release of the next tranche of its bailout package, aimed at stabilizing the country's struggling economy. Among them is the approval of a ₹ 17.6 trillion budget for the 2025–26 financial year, aligned with IMF targets.
One major condition involves implementing new Agriculture Income Tax laws, which include establishing systems for return filing, taxpayer registration, communication campaigns, and a compliance framework—all to be completed by June 2025, ANI reported.
Another requirement is the publication of a governance action plan based on findings from the IMF's Governance Diagnostic Assessment.
The IMF has also asked Pakistan to develop and publish a financial sector strategy outlining its institutional and regulatory roadmap from 2028 onward.
The IMF's priority remains to anchor inflation within the central bank's medium-term target range of 5–7 per cent.
These conditions follow the IMF's May 9 review of a $1 billion Extended Fund Facility (EFF) and consideration of a new $1.3 billion Resilience and Sustainability Facility (RSF), bringing total disbursements under the $7 billion program to $2 billion so far.
(With inputs from agencies)
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