Government pledges no fuel subsidies, market interventions, or new guaranteed incentives under IMF programme
Pakistan has committed to the International Monetary Fund that it will not introduce any fuel subsidy or cross-subsidy scheme as part of conditions under the ongoing IMF programme.
According to the IMF’s latest country report on Pakistan, the government agreed to a series of fiscal, monetary, financial, and social sector commitments aimed at maintaining macroeconomic stability and ensuring programme compliance.
Under fiscal commitments, Pakistan pledged to use any windfall profits from State Bank of Pakistan dividends exceeding 1% of GDP to reduce borrowing and retire debt instead of increasing expenditures.
The government also committed to refraining from introducing any new fuel subsidy or cross-subsidy arrangement, a move aimed at avoiding additional fiscal pressure and maintaining energy pricing reforms.
The IMF report further stated that Pakistan agreed not to offer new fiscal incentives or guaranteed returns in any currency to firms or investment projects.
Authorities also committed to publishing semi-annual reports detailing updates on debt management strategy, outlook, and implementation.
In the social sector, Pakistan pledged to continue inflation-linked adjustments in unconditional cash transfer (UCT) benefits to protect the purchasing power of vulnerable households.
The government also agreed to revise UCT benefits whenever new household surveys are released to maintain transfers equivalent to 15% of consumption for the bottom income quintile.
The report said Pakistan would keep the National Socio-Economic Registry (NSER) active and maintain open enrollment under the Benazir Income Support Programme while continuing periodic beneficiary reviews.
On monetary and financial commitments, Pakistan agreed to maintain a flexible exchange rate regime with unrestricted interbank price discovery.
The IMF report stated that the SBP would avoid involvement in sector-specific lending targets and refrain from introducing new refinancing schemes.
The central bank also committed not to conduct outright secondary-market purchases or maturity extensions of government securities.
In foreign exchange management, Pakistan agreed to limit the SBP’s net foreign exchange sales and consult the IMF if gross sales exceed $200 million during any rolling 30-day period.
The central bank will also continue publishing monthly foreign exchange intervention data with a three-month lag and announce six-month reserve targets and government FX debt servicing obligations semi-annually.
The IMF report further highlighted commitments related to strengthening financial sector oversight, including implementation of the Securities and Exchange Commission of Pakistan five-year strategic plan for the insurance sector and reforms to improve bank resolution and crisis management frameworks.
Analysts said the commitments indicate Pakistan’s continued focus on fiscal discipline, market-based reforms, and structural adjustments under the IMF-supported programme.