The conditions attached to the International Monetary Fund (IMF) bailout package have been revealed, following the Executive Board’s approval of a $7 billion Extended Fund Facility (EFF) for Pakistan, which includes the immediate release of approximately $1.1 billion.
According to sources in the Ministry of Finance, the IMF has mandated that Pakistan revise the National Finance Commission (NFC) Award formula and monitor provincial government expenditures. Key conditions require ongoing negotiations between the federal and provincial governments regarding a National Finance Pact.
Additional stipulations include:
- Limiting energy subsidies to no more than 1% of GDP.
- Prohibiting the release of supplementary grants during the IMF program.
- Bringing the agricultural, property, and retail sectors into the tax net.
- Implementing reforms to lower electricity prices and introducing a comprehensive package for this purpose.
- Reviewing power purchase agreements within the energy sector.
The conditions also specify that future electricity price relief cannot follow the model used by the Punjab government, that subsidized food prices will not be established, and that the federal government’s structure must be downsized.
