IMF sets 11 new conditions, including parliamentary approval of FY2027 Budget

ISLAMABAD: The International Monetary Fund (IMF) has slapped 11 new Structural Benchmarks (SBs) on Pakistan including parliamentary approval of a fiscal year 2027 budget in line with IMF staff agreement to meet programme targets, notification of the semi-annual gas tariff adjustment, the annual power tariff adjustment and enhancing NAB’s autonomy and transparency by submitting to parliament amendments to the NAB ordinance to establish an open, merit-based, rigorous and competitive selection process of senior management.

This was revealed in the report third review under the Extended Fund Facility and second review under the Resilience and Sustainability Facility, bringing the number to 55 condition under the program.

New SBs are proposed to monitor the program’s structural agenda, including on approval of the FY27 budget, improving revenue administration, strengthening the anti-corruption and public procurement frameworks, continuing regular adjustments to gas and power tariffs, maintaining the generosity of the UCT program, preparing a roadmap for gradual FX liberalization and enhancing regulatory transparency and predictability.

On fiscal, new Structural Benchmarks included;

1 Parliamentary approval of a FY27 budget in line with IMF staff agreement to meet program targets, including an underlying primary balance of 2 percent of GDP. The rational is to ensure achievement of fiscal objectives.

READ MORE: Pakistan, IMF discuss upcoming federal budget

The timeline is end-June 2026, (2) Prepare an audit manual and audit policy centralizing the audit case selection process via administrative prioritization and and a report to monitor high-risk cases through the Compliance Risk Management system with the rational to align revenue administration with best international practices by end-August 2026, (3) Amend PPRA rules to eliminate SOE preferences in awarding public procurement contracts without competition to ensure transparency and a level playing field in all public procurement by end-September 2026.

On governance SBs included (4) Enhance NAB’s autonomy and transparency by: (i) submitting to parliament amendments to the NAB ordinance to establish an open, merit-based, rigorous and competitive selection process of senior management, including adopting pre-determined qualification criteria and designating a multi- sectoral stakeholder committee to conduct selection in line with the recommendations of the Governance and Corruption Diagnostic report; and (ii) publishing NAB’s investigation and prosecution rules and annual statistics regarding the investigation, prosecution, and conviction of corruption offences.

The rational is to enhance transparency and accountability by end-January 2027.

On Social (5) Annual inflation and generosity adjustment of the unconditional cash transfer (Kafaalat) program quarterly benefit.

Maintain UCT real purchasing power by end-January 2027.

On Monetary and Financial (6) SBP to develop a roadmap for gradual foreign exchange regime liberalization, including appropriate sequencing (macroeconomic, financial stability, and other preconditions). The rational is liberalize FX regime by end-March 2027.

On energy Sector (7) notification of the semi-annual gas tariff adjustment. Maintain energy tariffs at cost recovery levels. July 1, 2026

(8) Notification of the semi-annual gas tariff adjustment. Maintain energy tariffs at cost recovery levels. February 15, 2027

(9) notification of the annual power tariff adjustment. Maintain energy tariffs at cost recovery levels. January 15, 2027.

On Trade, Investment Policy, and Deregulation

(10) Enact amendments to: (i) the SEZ Act and phase-out existing fiscal incentives to SEZs (consistent with the FY26 Finance Bill) and shift from profit-based to cost-based incentives as per the agreed phase- out plan, and discontinue the rights and responsibilities of the BOA, BOI, and existing SEZ Authorities in granting tax incentives; and (ii) the STZA Act to phase-out all existing fiscal incentives to STZs by 2035.

Copyright Business Recorder, 2026