The International Monetary Fund (IMF) has reportedly imposed 11 fresh conditions on Pakistan for the approval of the next $1.2 billion tranche under its ongoing financing programme, according to The News.
Key requirements include reforms in public procurement rules to eliminate preferential treatment for state-owned enterprises in multi-billion-rupee contracts, alongside broader structural adjustments across fiscal and regulatory sectors.
Under the agreed framework, Pakistan has committed to notify semi-annual gas tariff adjustments from July 2026 and annual electricity tariff adjustments from January 2027, signalling further price rationalisation in the energy sector during FY2026–27.
The IMF has also required amendments to legislation governing Special Economic Zones (SEZs) and Special Technology Zones (STZs). The revisions aim to phase out fiscal incentives in line with the Finance Bill 2026, transition from profit-based to cost-based models, and gradually eliminate all associated incentives by 2035, including those under China-Pakistan Economic Corridor (CPEC)-linked SEZs.
According to the report, amendments to Public Procurement Regulatory Authority (PPRA) rules are expected by September 2026, following the upcoming federal budget approval cycle.
The IMF Executive Board is expected to consider the completion of the third review under the $7 billion Extended Fund Facility (EFF) next month, which would pave the way for the release of the fourth tranche.
Pakistan has also agreed that parliamentary approval for the 2026–27 budget will align with IMF staff recommendations as part of the staff-level agreement covering both the EFF and the Resilience and Sustainability Facility (RSF).
An IMF mission is expected to visit Islamabad next month to finalise fiscal and budgetary frameworks with the Ministry of Finance for the upcoming budget cycle.
Additional structural reforms include proposed amendments to the National Accountability Bureau (NAB) Ordinance by January 2027 to establish a merit-based and competitive selection process.
To address tax shortfalls, the Federal Board of Revenue (FBR) will implement a centralised audit case selection mechanism. The tax authority has been facing a significant revenue gap, with a revised target of Rs13.97 trillion for FY2025–26.
On social protection, the government has agreed to increase the Benazir Income Support Programme (BISP) stipend from Rs14,500 to Rs19,500 starting January 2027, subject to budgetary allocation.
The State Bank of Pakistan (SBP) has also committed to developing a roadmap for gradual liberalisation of the foreign exchange regime by the first quarter of 2027, aimed at easing currency market restrictions.
Separately, a new regulatory reform initiative will establish a Pakistan Regulatory Registry to streamline federal and Islamabad Capital Territory (ICT) business regulations.
The developments come as Pakistan continues to implement reforms under IMF-backed economic stabilisation and structural adjustment programmes.