The government has launched a series of stringent measures to comply with conditions for a $1.1 billion tranche from the International Monetary Fund (IMF).
Approval of the second instalment from the IMF’s Extended Fund Facility (EFF) includes 39 rigorous conditions. These involve mandatory asset disclosures by civil servants and their families, the abolition of tax amnesties and exemptions, and a report assessing governance and corruption.
Sources indicate that the IMF has established benchmarks such as maintaining foreign exchange reserves for three months of import bills, meeting fiscal targets, and restructuring public finances.
Additionally, the IMF mandates maintaining a maximum 1.25% disparity between the open market and interbank exchange rates and ensuring that the State Bank of Pakistan’s foreign reserves hit $8.65 billion by fiscal year-end.
The Ministry of Finance has confirmed that adherence to 22 critical points is necessary to secure the $1.1 billion instalment. Notably, civil servants must disclose their assets by February 2025. The IMF also demands a prohibition on budgetary overruns and insists on comprehensive fiscal discipline.
The strategy includes capping government guarantees at Rs5.6 trillion, controlling power sector debts at Rs417 billion, and addressing tax refund backlogs at Rs24 billion.
During a briefing before the National Assembly’s Standing Committee on Finance, Finance Minister Muhammad Aurangzeb reported achieving macroeconomic stability over the past 14 months. However, he emphasized reducing intermediaries to combat inflation.
He disclosed that the Economic Coordination Committee (ECC) plans monthly reviews of food prices.
The minister asserted that this IMF agreement should signal to the international community Pakistan’s final reliance on such aid, underscoring the need for urgent reforms in taxation, energy, and population control. He also raised concerns about climate change, child stunting, and increasing numbers of children not attending school.
Aurangzeb highlighted ongoing discussions with the World Bank to establish a 10-year partnership framework to enhance economic stability. He noted that recent economic improvements had positively impacted the stock market.
