The Ministry of Finance clarified on Sunday that the recently highlighted structural benchmarks under Pakistan’s IMF Extended Fund Facility (EFF) are part of a phased, medium-term reform agenda agreed with the Fund, rather than abrupt or new conditions.
The clarification comes after recent commentary describing the 11 benchmarks as “new conditions.”
The Finance Division said the measures build on reforms already initiated by the government and are implemented in a sequenced, step-by-step manner to achieve the program’s policy objectives.
The Memorandum of Economic and Financial Policies (MEFP) finalized after the EFF’s Second Review supplements the earlier MEFP and reflects this phased approach, ensuring continuity and deepening of Pakistan’s reform agenda.
According to a statement from the ministry, the benchmarks cover multiple sectors, including fiscal management, governance, financial markets, state-owned enterprises, energy, trade, and corporate regulation.
Key reforms include enhancing transparency of civil servants’ asset declarations following amendments to the Civil Servants Act, strengthening the operational effectiveness of the National Accountability Bureau (NAB) and coordination with provincial anti-corruption bodies, and empowering provincial anti-corruption establishments with access to financial intelligence under the ongoing Anti-Money Laundering and Countering Financing of Terrorism (AML/CFT) framework.
The government is also focusing on improving remittance flows by removing bottlenecks in cross-border payments, which helped increase remittances by 26 percent in FY25, with further growth projected for FY26. Structural reforms in financial markets include a study of the local currency bond market to broaden the investor base.
The government is advancing a comprehensive reform roadmap for the Federal Board of Revenue (FBR), operationalizing the Tax Policy Office, strengthening compliance risk management, and preparing a medium-term (3-5 year) tax reform strategy to improve revenue predictability and administration.
Energy and state-owned enterprise reforms include privatization of selected power distribution companies (DISCOs), finalizing preconditions for private sector participation in HESCO and SEPCO, and signing Public Service Obligation (PSO) agreements with major entities.
In trade and commodity markets, the government is deregulating the sugar sector to reduce price distortions and liberalize market operations, while regulatory reforms aim to improve corporate governance, compliance for unlisted firms, and efficiency of special economic zones. Contingency measures to address potential revenue shortfalls, including a Federal Excise Duty on fertilizer and pesticides, remain part of the program framework.
The IMF’s Second Review report noted that eight of 13 prior benchmarks had been met, including approval of the FY26 budget in line with program targets, implementation of the new agricultural income tax, and amendments to enhance asset disclosures of public officials.
Some benchmarks, including governance action plans and contingency revenue measures, were delayed due to ongoing reform implementation and the impact of recent floods. Authorities have requested resetting these benchmarks for future deadlines, emphasizing that progress remains on track.
Authorities said the phased approach ensures reforms are sequenced, sustainable, and aligned with Pakistan’s medium-term economic priorities, underscoring that the EFF’s structural benchmarks support the government’s own reform agenda rather than imposing externally driven or unprecedented conditions.
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