Fund links fiscal discipline, energy pricing, governance reforms, and FX liberalization to programme targets
The International Monetary Fund has released a new country report for Pakistan outlining 11 additional structural benchmarks under its ongoing reform programme, with approval of the Budget 2026-27 placed among the key priorities.
The benchmarks were issued following the disbursement of the third tranche under Pakistan’s Extended Fund Facility (EFF) and the second review under the Resilience and Sustainability Facility (RSF). The new conditions bring the total number of programme requirements to 55.
According to the report, the new structural benchmarks are aimed at strengthening fiscal discipline, improving governance, reforming energy pricing mechanisms, enhancing revenue administration, and advancing gradual economic liberalisation.
A central requirement includes parliamentary approval of the fiscal year 2026-27 budget in line with IMF staff agreements, targeting an underlying primary surplus of 2% of GDP by June 2026.
The IMF said this measure is intended to ensure Pakistan remains on track to meet fiscal consolidation targets under the programme.
Other fiscal-related conditions include preparation of an audit manual and policy to centralise audit case selection through a compliance risk management system by August 2026, aimed at improving tax administration and reducing high-risk revenue leakages.
By September 2026, Pakistan has also been asked to amend Public Procurement Regulatory Authority (PPRA) rules to eliminate preferential treatment for state-owned enterprises in non-competitive procurement processes.
In governance reforms, the IMF directed Pakistan to enhance the autonomy and transparency of the National Accountability Bureau by submitting amendments to Parliament for a merit-based and competitive selection system for senior management.
The reforms also include publishing investigation and prosecution rules along with annual statistics on corruption cases by January 2027 to improve institutional transparency.
On the social protection side, the IMF called for maintaining the real value of the Kafaalat unconditional cash transfer programme through inflation-linked adjustments by January 2027.
In the monetary and financial sector, the State Bank of Pakistan has been tasked with developing a roadmap for gradual foreign exchange regime liberalisation by March 2027, including sequencing reforms based on macroeconomic and financial stability conditions.
Energy sector reforms remain a key focus, with the IMF requiring regular cost-recovery tariff adjustments. These include semi-annual gas tariff notifications on July 1, 2026, and February 15, 2027, along with an annual electricity tariff adjustment due by January 15, 2027.
On trade and investment policy, Pakistan has been instructed to amend Special Economic Zone (SEZ) and Special Technology Zone (STZ) laws, phase out existing tax incentives, shift toward cost-based incentives, and eliminate preferential regimes by 2035.
The IMF said these structural benchmarks are designed to support macroeconomic stability, strengthen institutions, improve transparency, and ensure long-term sustainable growth under Pakistan’s reform agenda.
Analysts say the expanded conditions signal continued close monitoring of Pakistan’s fiscal and economic policy direction as the country moves through successive programme reviews.