IMF’s New Conditions: What They Mean for Pakistan’s Economy and Your Wallet

The International Monetary Fund just dropped another bombshell on Pakistan. Eleven new conditions have been added to the country’s $7 billion bailout package, bringing the total number of requirements to a staggering 64. For a programme that’s barely eighteen months old, that’s an average of more than three new conditions added every month.

If you’re wondering what this means for the average Pakistani trying to make ends meet, you’re not alone. Let’s break down what’s really happening behind the bureaucratic language and economic jargon.

The Numbers Tell a Sobering Story

When Pakistan signed up for this bailout, the hope was that it would provide breathing room to fix fundamental economic problems. Instead, we’re watching the conditions pile up like unpaid bills. Sixty-four conditions might sound like just a number, but each one represents a policy change, a reform, or a commitment that affects how the country operates.

TheIMF released its staff report for the second review on Thursday, and the document reads like a stern teacher’s report card filled with action points. Some of these conditions target corruption, others aim at specific industries like sugar, and several focus on improving how the government collects taxes and manages power distribution.

Fighting Corruption or Creating More Paperwork?

One of the headline-grabbing conditions requires Pakistan to publish asset declarations of high-level federal civil servants on a government website by December next year. The idea sounds good on paper—literally. Match someone’s income against their declared assets, and you might spot irregularities that suggest corruption.

But anyone who’s worked in or around Pakistani bureaucracy knows the reality is more complicated. Will these declarations be accurate? Will they be verified? And perhaps most importantly, will anyone actually face consequences when mismatches are found?

The government plans to expand this requirement to provincial civil servants and even give banks access to these declarations. That’s a significant step toward transparency, assuming it’s implemented properly. The National Accountability Bureau will coordinate action plans for the ten departments identified as highest risk.

Here’s the uncomfortable truth though: Pakistan has tried similar initiatives before. We’ve had asset declaration requirements, we’ve had accountability drives, and we’ve had high-profile corruption cases. Yet somehow, the problem persists. The question isn’t whether we need these reforms—we clearly do. The question is whether this time will be any different.

The Hidden Cost of Sending Money Home

One condition that deserves more attention than it’s getting involves remittances. The IMF wants Pakistan to complete a comprehensive assessment of remittance costs and barriers to cross-border payments, with an action plan due by May next year.

This matters because remittances are Pakistan’s financial lifeline. When your brother in Dubai, your cousin in London, or your uncle in America sends money home, that transaction costs money. The IMF projects these costs will reach $1.5 billion in the next couple of years. That’s $1.5 billion being eaten up by fees and exchange rate margins instead of reaching Pakistani families.

Think about what that means on a human level. A worker in the Gulf earning modest wages already makes sacrifices to send money home. When a significant portion disappears in transaction fees, that’s less money for school fees, medical bills, or basic household expenses. Finding ways to reduce these costs isn’t just good economic policy—it’s about making life easier for millions of families.

Sugar: Sweet for Some, Bitter for Most

The sugar industry condition is fascinating because it exposes how certain sectors of Pakistan’s economy work. The IMF is demanding federal and provincial governments agree on a national policy for sugar market liberalisation by June next year.

The phrase “elite capture” appears in the IMF report, and it’s not subtle. Pakistan’s sugar industry has long been criticized for being controlled by powerful families and political figures. Licensing restrictions, price controls, import and export permissions, and zoning rules have created a system where a few players dominate the market.

Meanwhile, consumers pay inflated prices, and the industry operates with limited competition. The proposed reforms would address licensing, pricing, import-export rules, and zoning with clear implementation timelines. Whether these reforms will actually break the stranglehold of established players remains to be seen, but at least someone’s finally saying it out loud.

The Tax Collection Disaster

The Federal Board of Revenue’s performance has been so poor that the IMF felt compelled to add specific conditions just for tax collection. By the end of December, the government must finalize a roadmap prioritising reforms, assessing staffing needs, setting timelines, estimating revenue impacts, and determining performance indicators.

The FBR’s struggles aren’t new. Pakistan has one of the lowest tax-to-GDP ratios in the region. Too many people and businesses either don’t pay taxes or find ways around them. The system is complex, enforcement is weak, and corruption is endemic. Fixing this isn’t optional—without better tax collection, Pakistan will remain trapped in a cycle of borrowing and austerity.

The IMF wants at least three priority reform areas fully implemented, complete with subordinate legislation, staff hiring, and initial performance reporting. By December next year, the government must develop and publish a comprehensive medium-term tax reform strategy.

This sounds like exactly the kind of fundamental restructuring Pakistan needs. The challenge is whether it can actually happen in a country where powerful interests have spent decades avoiding taxes.

The Power Sector’s Persistent Problems

Energy sector reforms appear again in the new conditions. The government must finalize preconditions for private-sector participation in HESCO and SEPCO—two of the country’s most loss-making power distribution companies—and sign public service obligation agreements with the seven largest entities before the next budget.

Pakistan’s power sector losses have been a drain on the economy for years. Distribution companies lose money, the government subsidizes them, and the circular debt keeps growing. Getting the private sector involved could improve efficiency and reduce losses, but it’s a politically sensitive move that affects millions of consumers.

The Mini-Budget Nobody Wants to Talk About

Perhaps the most immediate concern for ordinary Pakistanis is buried in the report: the government has agreed to a possible mini-budget if revenues fall short by the end of December 2025.

What would this mini-budget include? Higher federal excise duty on fertilizers and pesticides by 5%, excise duty on high-value sugary items, and broadening the sales tax base by moving select items to the standard rate.

In plain language: if the government doesn’t collect enough taxes, they’ll raise taxes on agricultural inputs and consumer goods. Farmers will pay more for fertilizer, potentially increasing food production costs. Consumers will pay more for certain products. And the sales tax base will expand, meaning more items will be taxed at higher rates.

This is the reality of IMF programmes. When targets aren’t met, someone has to pay. That someone is usually the people who are already struggling.

Corporate Governance and Business Regulations

The conditions also target corporate governance, with proposed amendments to the Companies Act 2017 to strengthen compliance for unlisted firms and modernize governance structures. There’s also a concept note required for amendments to the Special Economic Zones Act.

These might seem like technical details, but they matter for investment climate and business confidence. Better corporate governance could attract investment and improve business practices. The question is whether these changes will be substantive or just more bureaucratic requirements that companies find ways to work around.

What This Really Means for Pakistan

Stepping back from the individual conditions, what’s the bigger picture? Pakistan is being asked to fundamentally restructure how its government operates, how it collects revenue, how it manages key industries, and how it fights corruption.

These aren’t unreasonable demands. Pakistan genuinely needs these reforms. The problem is the pace and the political difficulty of implementation. Powerful interests benefit from the current system. Bureaucratic resistance to change is real. And the political will to push through unpopular reforms often evaporates when elections approach.

The IMF programme was supposed to stabilize the economy and create space for reform. Instead, it sometimes feels like we’re just adding more requirements to an already overwhelming list while the fundamental problems persist.

The Human Cost

Beyond the economic statistics and policy papers, there are real people affected by these decisions. The mini-budget could mean higher food prices. Tax reforms could affect business costs and employment. Power sector changes could impact electricity bills. Anti-corruption measures might finally hold officials accountable, or they might just create more bureaucracy without results.

Every condition in that IMF report will eventually touch someone’s life—a shopkeeper calculating whether to raise prices, a farmer deciding whether fertilizer is still affordable, a family waiting for remittances to cover monthly expenses, or a worker wondering if their job is secure.

Can Pakistan Actually Do This?

The real question isn’t whether Pakistan should implement these reforms—most of them make sense. The question is whether the country has the institutional capacity and political will to execute them effectively.

Pakistan has signed multiple IMF programmes over the decades. We’ve made commitments before. Sometimes we follow through, often we don’t. The pattern of partial implementation followed by another crisis and another bailout has become depressingly familiar.

Breaking this cycle requires more than just agreeing to conditions. It requires fundamental changes in how the country governs itself, how it treats accountability, and how it balances competing interests.

Looking Forward

The path ahead isn’t easy. Sixty-four conditions represent sixty-four areas where Pakistan needs to demonstrate progress. Some are straightforward administrative tasks. Others require confronting powerful interests and making politically difficult choices.

The asset declarations might expose corruption, or they might just add another layer of paperwork. The sugar market reforms might break elite control, or they might be watered down through implementation. The tax reforms might finally broaden the tax base, or they might face resistance from those who’ve never paid their fair share.

What’s certain is that the next eighteen months will be crucial. The government has agreed to specific timelines and deliverables. The IMF will be watching closely. And ordinary Pakistanis will be living with the consequences of whatever does or doesn’t happen.

The Bottom Line

Eleven new conditions added to an already long list might sound like just another news story, but it represents something more fundamental. It’s a reminder that Pakistan’s economic challenges aren’t going away quickly, that solutions require sustained effort and political courage, and that the choices made today will affect the country for years to come.

For now, we wait and watch. Will this programme be different from the previous ones? Will these reforms actually happen, or will we be back in the same place in a few years? The answer will be written not in IMF reports but in whether Pakistan can finally break its cycle of crisis and bailout.

The conditions are clear. The deadlines are set. What remains to be seen is whether Pakistan can deliver on its commitments and finally create a more sustainable economic future. Time will tell, but history suggests we should be cautiously skeptical while hoping for the best.