These measures are a part of Pakistan’s plan to efficiently full the second evaluate of the $7 billion Prolonged Fund Facility (EFF) and unlock the third $1 billion tranche, together with the primary $200 million tranche underneath the $1.4 billion Resilience and Sustainability Facility (RSF).
The IMF’s not too long ago launched employees report highlights that Pakistan has achieved most targets underneath the programme, although it initiatives that the nation’s steadiness of fee hole may widen to $3.253 billion by 2029–30, signaling potential want for one more IMF programme sooner or later.
The report outlines contingency measures the federal government plans to undertake if revenues fall brief by December 2025.
These embrace elevating excises on fertilisers and pesticides by 5 share factors, introducing levies on high-value sugary objects, and broadening the GST base.
As well as, Islamabad is able to cut back or postpone spending in response to decrease revenues.
Different commitments embrace full deregulation of the sugar sector, continued tariff changes within the energy sector, and measures to cut back system losses and prices.
The federal government may even roll out point-of-sale methods for 40,000 giant retailers nationwide over the subsequent two years, whereas all provinces will transfer towards harmonised gross sales tax procedures.
The IMF report notes that, within the present fiscal yr, Pakistan will prohibit spending on new growth schemes to 10% of the PSDP, prioritising completion of ongoing initiatives value round Rs2.5 trillion.
From the subsequent fiscal yr, higher focus will probably be positioned on climate-related initiatives.
Public procurement is about to transition to digital e-pads, with the Auditor Basic required to submit a compliance report back to the president by March 2026.
Below social safety measures, the Kafalat money switch underneath the BISP programme will rise to Rs14,500 per quarter from January 2026, increasing protection to 10.2 million households.
Biometric verification for funds will stay obligatory, and the federal government plans to launch the long-awaited e-wallet system by June 2026.
On vitality reforms, the IMF has famous that the federal government has already determined to shift annual tariff rebasing from July to January 2026. Final fiscal yr, the round debt inventory was diminished to Rs1.614 trillion.
By January 2026, the federal government goals to settle Rs1.2 trillion owed to industrial banks, out of which Rs660 billion will go to Pakistan Non-public Holdings Restricted and the remainder to the Central Energy Buying Company.
The plan additionally contains eliminating Rs128 billion in curiosity funds owed to IPPs and retaining the round debt at zero influx till fiscal yr 2031.
The Fund highlights that 5.2 million earnings tax returns have been filed in FY2024, whereas the quantity is predicted to succeed in 7 million in FY2025.
It acknowledges Pakistan’s progress on stabilisation, noting enhancements in international alternate reserves, which have risen to $14.5 billion, and a 1.3% main surplus delivered in FY2025.
Fiscal efficiency stays robust, with the first surplus recorded at 1.3%, and the IMF report says this surplus was achieved in keeping with the programme goal.
In accordance with the report, inside one yr, international alternate reserves elevated from $9.4 billion to $14.5 billion, and reserves are projected to rise additional within the coming years.
The IMF says Pakistan has achieved its first present account surplus in 14 years and phrases the first surplus goal for fiscal yr 2025–26 achievable. Reforms to extend revenues and cut back debt are described as ongoing.
On inflation, the IMF notes that inflation elevated because of meals costs following the floods however says this inflationary strain is momentary. Inflation is projected to ease to 7% within the present fiscal yr.
The IMF has careworn sustaining a good financial coverage to maintain inflation underneath management. It additionally says alternate charge flexibility is important to soak up shocks.
On the identical time, the IMF warns that the 2022 floods highlighted Pakistan’s deep local weather vulnerability, having affected seven million folks and claiming almost 1,000 lives, whereas inflicting intensive losses to infrastructure, houses and livestock.
The report says that following the floods, the significance of reforms and coverage continuity has elevated additional, and it urges stronger local weather adaptation measures, improved water administration and catastrophe preparedness.
The worldwide lender has additionally careworn sustained reforms in taxation, governance, state-owned enterprises and vitality to safe long-term progress.
It says Pakistan should widen the tax internet, simplify tax procedures, guarantee information transparency, and keep a strict financial coverage to maintain inflation steady. Strengthening foreign exchange market transparency and decreasing coverage uncertainty are additionally important.
The IMF report provides that progress has been made in bettering the ability sector by way of vitality tariff changes, however additional reforms are required to stabilise the sector.
It additionally notes that bettering governance in state-owned enterprises and the funding setting is vital, and that commerce and funding reforms are important for sustainable progress.
It says RSF reforms will assist enhance flood danger administration and water governance.
The report concludes that Pakistan’s financial restoration stays fragile however is shifting in the suitable path underneath the present programme.
Stronger reforms and constant coverage implementation, it notes, will probably be important for reducing debt, elevating income and sustaining progress within the years forward.
