IMF tightens rules for Pakistan's $7 billion bailout, imposes new conditions
PTC News Desk: The International Monetary Fund (IMF) has slapped 11 new conditions on Pakistan for its $7 billion bailout package to crackdown on corruption. The move raised the total compliance requirements on Pakistan to 64 over 18 months, according to the Fund's staff-level report for the second review.
The move came after IMF raised concerns over country's economic management , even as it approved disbursement of about $1.2 billion under its bailout programmes even while warning of risks emerging from policy slippages, structural vulnerability and weak institutions.
“Policy priorities remain centred on maintaining macroeconomic stability and advancing reforms to strengthen public finances, enhance competition, raise productivity and competitiveness, bolster the social safety net and human capital, reform SOEs, and improve public service provision and energy sector viability,” the IMF said.
The IMF also highlighted that despite Pakistani authorities showed strong implmentation of programmes, the economony required sustained discipline after being exposed to alrming risks.
The IMF’s mention of state-owned companies and the energy sector points to its long-standing worries about Pakistan’s persistent losses, inefficiency, and financial strain in these areas — problems that have repeatedly derailed the country’s economic stabilisation plans.
In its staff report, the IMF said that proper monitoring of the programme depends on regular, detailed updates from Pakistani institutions such as the State Bank of Pakistan, the Ministry of Finance, and other agencies. It also warned that any violations of continuous performance criteria must be reported right away.
Pakistan’s Debt Situation
The IMF also highlighted Pakistan’s heavy debt load and its dependence on foreign loans. According to the report, Pakistan’s total public debt is over $307 billion, with external debt making up more than one-third of it. A significant portion of this external debt is owed to the IMF and other international lenders.
The Fund acknowledged that Pakistan has made some progress but emphasised that these improvements are still delicate.
It noted that Pakistan posted a strong fiscal performance, achieving a primary surplus of 1.3% of GDP in FY25, which met the set targets. However, it also pointed out that inflation has gone up because floods increased food prices, worsening the financial stress on households.
The IMF warned that Pakistan’s economic recovery remains weak and can be easily disrupted by shocks or policy setbacks, especially given the tough global economic situation.
- With inputs from agencies
