Pakistan's Finance Ministry Clarifies IMF Targets as Phased Reforms

The Finance Ministry of Pakistan has clarified that the 11 targets recently categorized as “new conditions” under the International Monetary Fund’s (IMF) Extended Fund Facility (EFF) are part of a phased reform agenda rather than abrupt policy changes. This clarification follows the IMF's documentation that outlines Pakistan's commitment to these structural benchmarks, which are essential for the completion of the second EFF review and the subsequent approval for a $1.2 billion disbursement on December 9, 2025.

DawnExpress TribuneFinance Ministry says IMF targets are phased reforms, not new conditions

The ministry emphasized that the measures reflect continuity, sequencing, and deepening of reforms already agreed upon under the $7 billion EFF program. Each review builds upon prior actions, with structural reforms implemented gradually to achieve medium-term policy objectives. The latest Memorandum of Economic and Financial Policies (MEFP) supplements earlier agreements and incorporates initiatives already undertaken by the government.

Finance Ministry says IMF targets are phased reforms, not new conditionsDawnExpress Tribune

Among the 11 targets, the ministry highlighted the public disclosure of asset declarations for civil servants, which has been part of the EFF since May 2024. Other measures include commitments to strengthen the National Accountability Bureau (NAB) and empower provincial anti-corruption establishments. The ministry noted that the increase in remittance inflows—26% year-on-year from FY24 to FY25—was a result of efforts to curb informal channels, with further increases projected.

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The ministry outlined several specific reforms, including:

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• Deregulation of the Sugar Industry: This initiative, originating from the government, aims to reduce state intervention in commodity markets.

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• Roadmap for the Federal Board of Revenue (FBR): This is part of a broader domestic resource mobilization strategy, including the establishment of a Tax Policy Office.

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• Privatization of Distribution Companies (DISCOs): This has been a core component of the EFF since its inception, with plans to finalize terms for private sector participation in companies like Hesco and Sepco.

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• Regulatory Reforms: Amendments to the Companies Act, 2017, are aimed at improving compliance and the business environment.

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The Finance Ministry stated that viewing these measures as sudden or unexpected reflects a lack of factual awareness. It reiterated that the EFF is a continuation of the agreed reform agenda, with many reforms already in progress. The ministry also noted that contingency measures to address potential revenue shortfalls have been part of the MEFP framework since May 2024.

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Despite the ministry's clarifications, some critics argue that the characterization of these targets as "phased reforms" may downplay the immediate economic pressures faced by Pakistan. They contend that the IMF's conditions could still impose significant challenges on the government and its ability to implement reforms effectively.

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• “In conclusion, the measures outlined in the latest 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,” — Finance Ministry, Pakistan

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• “The ministry stated that viewing these as sudden or unexpected new conditions reflects a lack of awareness of the facts.” — Finance Minister Muhammad Aurangzeb

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In conclusion, the Finance Ministry's clarifications aim to reassure stakeholders that the reforms under the IMF's EFF are part of a structured approach to economic stability and growth, rather than sudden impositions.

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