IMF Pushes Last-Minute Conditions to Strip Relief from Upcoming Budget

The International Monetary Fund (IMF) has started making last-minute demands and conditions as Pakistan finalizes its upcoming federal and provincial budgets under the new loan program, sources told ProPakistani. The lender has asked the government to fully implement all agreed reforms in the FY26 budget, both at the federal and provincial levels. This includes written guarantees from provincial governments to cut expenditures and take concrete steps to improve the business environment. One of the key IMF demands is a complete ban on subsidies for electricity and gas by both federal and provincial governments. The agency has called on provincial governments to restrict new hiring by undertaking right-sizing measures more seriously. The IMF also wants the government to build consensus in parliament around the budgetary targets and ensure that provinces play an active role in meeting them. It has demanded joint federal-provincial efforts to curb electricity and gas theft and combat smuggling. It has also directed that provinces include action plans for taxing agricultural income and services in their respective budgets.