The Ministry of Finance has rejected claims that the International Monetary Fund has imposed new conditions on Pakistan, saying the measures under discussion are part of a phased reform plan already agreed under the Extended Fund Facility.
In a clarification issued this week, the ministry said recent commentary has misrepresented the nature of the IMF programme. It explained that the reform agenda was designed as a medium-term framework, with steps introduced gradually through successive reviews, rather than through sudden or unexpected demands.
According to officials, each review builds on earlier commitments, with the overall goal of meeting policy targets agreed at the start of the programme.
Local bond market reforms part of earlier commitments
Addressing concerns over the local currency bond market, the ministry pointed to an IMF staff report published in May 2025. The report recommended a comprehensive study to identify obstacles limiting investor participation.
That recommendation was later formalised as a structural benchmark. The ministry said the objective is to broaden the investor base and strengthen Pakistan’s domestic debt market, not to introduce a new requirement.
Sugar sector deregulation initiated by government
The ministry also clarified that the proposed deregulation of the sugar industry was initiated by the government, not the IMF.
A task force set up by the Prime Minister’s Office, and chaired by the minister for power, is working on proposals for full liberalisation of the sector and the development of a national policy in consultation with the provinces.
Because the plan aligns with the IMF programme’s broader aim of reducing state intervention in commodity markets, it was included as a benchmark, officials said.
Tax reforms build on earlier IMF agreements
Tax administration reforms remain a central part of the IMF programme, according to the ministry. A comprehensive reform roadmap for the Federal Board of Revenue is being developed under the prime minister’s supervision.
Steps already taken include approval of a transformation plan, the establishment of a Tax Policy Office, and improvements in compliance risk management. The ministry said the current benchmark builds on commitments agreed with the IMF in May 2024 and March 2025.
The requirement to publish a medium-term tax reform strategy has been described as a natural extension of those earlier reforms.
Power sector privatisation planned in phases
On the power sector, the ministry said the privatisation of electricity distribution companies has been part of the IMF programme from the beginning.
The process is being carried out in phases. Current steps focus on preparing the Hyderabad and Sukkur electric supply companies for private sector participation, along with the signing of public service obligation agreements
Regulatory changes reflect continuity, not new demands
The ministry added that regulatory reforms, including amendments to the Companies Act and the SEZ law, as well as contingency measures to address revenue shortfalls, have been embedded in the programme since its early stages.
Overall, officials said the reforms being discussed reflect continuity within the agreed framework rather than the introduction of new IMF conditions.
