Latest IMF Conditions Not New But Already Part of $7 Billion Program: Finance Ministry

The Ministry of Finance said Monday that the 11 new structural benchmarks set by the International Monetary Fund (IMF) are not fresh conditions but a continuation of previously agreed reforms under the $7 billion program. It clarified that several additions became necessary due to developments after the September 2024 Memorandum for Economic and Financial Policies (MEFP). The requirement to publish a post-2027 financial sector strategy stems from the 26th constitutional amendment passed in October 2024, which mandates a riba-free economy by January 2028. The ministry said fiscal benchmarks like approving the FY26 budget in consultation with the IMF and achieving a 1.7 percent primary surplus were already part of the fiscal consolidation plan. It also clarified that reforms on agricultural income tax, increased BISP transfers, governance diagnostics, and making the captive power levy permanent were all follow-up actions from the September 2024 MEFP. The ministry noted that power and gas tariff adjustments were routine measures to limit circular debt and had been reiterated, not introduced. The new benchmark on removing the debt service surcharge cap is tied to the government’s plan to convert up to 80 percent of Central Power Purchasing Authority (CPPA) arrears into debt, an initiative introduced after the last MEFP. On trade, the easing of used car import restrictions and phasing out STZ incentives by 2035 expand earlier commitments. The ministry added that the IMF program supports phased reforms, and the latest benchmarks are a logical extension of existing conditions only.