The Ministry of Finance on Sunday denied the imposition of any new conditions under the International Monetary Fund’s Extended Fund Facility (EFF) loan programme, saying that the lender’s structural benchmarks aligned with its own reform agenda.
“The measures outlined in the latest Memorandum of Economic and Financial Policies (MEFP) represent continuity, sequencing, and deepening of Pakistan’s agreed reform agenda under the IMF’s Extended Fund Facility, rather than the imposition of abrupt or unprecedented conditions,” the ministry said in a statement.
Clarifying the intent, context, and continuity of reform measures under the EFF while responding to the commentary regarding so-called “new conditions,” it said that the measures referenced are part of a phased, medium-term reform agenda agreed with the IMF, many of which are extensions or logical progressions of reforms already initiated by the government.
Noting that the EFF is designed to support countries in implementing medium-term structural reforms aimed at achieving agreed policy objectives, the finance ministry highlighted that reforms are implemented in a sequenced and step-by-step manner over the duration of the program.
“Each review builds upon prior actions to ensure that the ultimate policy goals agreed at the outset of the program are achieved.”
“Actions under the EFF are structured as logical steps, with additional measures incorporated at each successive review. The MEFP finalised following the Second Review of the EFF supplements the MEFP agreed during the First Review and reflects this phased approach,” the ministry added.
The statement also shed light on the process of IMF-government talks where Islamabad presents its planned policy reform initiatives. Where the IMF assesses that these initiatives contribute to the agreed program objectives, they are incorporated into the MEFP and a result, many of the structural benchmarks and actions included in the latest MEFP are derived from reforms already undertaken or initiated by the government “rather than being externally imposed or newly introduced conditions”.
The Ministry of Finance further pointed out details and clarification of the “new conditions” as;
Asset declarations of civil servants
This reform has been part of the EFF program since the initial MEFP in May 2024.
The current structural benchmark represents the second step, following the successful legislative amendment to the Civil Servants Act, 1973.
Improving Nab’s operational effectiveness
Commitments to enhance the National Accountability Bureau’s (NAB) effectiveness and independence, including coordination with provincial anti-corruption establishments, were agreed during earlier reviews, the ministry said.
It added that the development of action plans for high-risk agencies is a continuation of this commitment and runs parallel to, rather than stemming from, the Governance and Corruption Diagnostic Assessment Report.
Moreover, the finance ministry said, allowing provincial anti-corruption bodies access to financial intelligence aligns with the ongoing Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) reform agenda, which has been integral to the EFF since its inception.
Facilitating remittances
Strengthening remittance inflows is critical to Pakistan’s external stability, it added.
“Following measures to curb informal channels, remittances increased by 26% year-on-year from FY24 to FY25, with a further increase of 9.3% projected for FY26.”
The government, the ministry said, in coordination with the State Bank of Pakistan, has been working to remove structural bottlenecks in cross-border payments. The IMF has built upon these efforts by incorporating them into the MEFP.
Local currency bond market development
The IMF staff report published in May 2025 recommended a comprehensive study to identify bottlenecks in the local currency bond market to broaden the investor base. This recommendation has now been formalised as a structural benchmark.
Sugar industry deregulation
The deregulation initiative originates from the government. A task force, notified by the Prime Minister’s Office and chaired by the Minister for Power, has been mandated to recommend full liberalisation of the sugar market and propose a national policy in consultation with provinces.
Given its alignment with the EFF objective of reducing government intervention in commodity markets, the IMF has included this initiative as a structural benchmark.
FBR reforms
The development of a comprehensive roadmap for the Federal Board of Revenue (FBR) is part of a broader domestic resource mobilisation reform agenda led directly by the Prime Minister.
Key actions already taken include approval of the Transformation Plan, establishment of the Tax Policy Office, and strengthening of Compliance Risk Management. This structural benchmark builds upon commitments made with the IMF in May 2024 and March 2025.
Medium-term tax strategy
The requirement to develop and publish a medium-term tax reform strategy is a logical extension of earlier reforms, particularly the establishment and operationalisation of the Tax Policy Office to separate tax policy formulation from FBR’s operational functions.
Discos’ privatisation
Privatisation of the distribution companies (Discos) has been a core component of the EFF program since its inception and is envisaged to occur in phases.
Finalising preconditions for private-sector participation in Hesco and SEPCO represents the next step following the initiation of the process for the first batch of Discos.
Additionally, the signing of Public Service Obligation (PSO) agreements with the seven largest entities reiterates an earlier program commitment.
Regulatory reforms, corporate compliance
Amendments to the Companies Act, 2017 to strengthen compliance for unlisted firms are part of the broader regulatory reform agenda aimed at improving the business climate, an objective embedded in the EFF from the outset.
Similarly, the structural benchmark related to a concept note for amendments to the SEZ Act follows the successful completion of a prior benchmark involving an SEZ assessment study.
Revenue shortfall contingencies
Contingency measures to address potential revenue shortfalls have consistently been part of the MEFP framework since May 2024.
The initial MEFP itself included a structural benchmark for introducing a 5% Federal Excise Duty on fertiliser and pesticides. –Agencies
