ISLAMABAD: The International Monetary Fund (IMF) has imposed strict conditions on Pakistan following the release of a $1 billion loan installment, ARY News reported on Thursday.
According to sources from the Ministry of Finance, the IMF’s terms include a review of the National Finance Commission (NFC) award and closer monitoring of provincial government spending. The program also involves reforms targeting the energy sector, including a reassessment of power purchase agreements and a package aimed at reducing electricity prices.
However, the IMF has barred the government from offering any future relief on electricity prices, as seen with the Punjab government.
Sources further revealed that the IMF has placed restrictions on setting support prices for food grains and called for a reduction in the federal government structure. The energy sector subsidies will be capped at 1% of GDP, and no supplementary grants will be issued during the program.
Tax reforms are another key component, with plans to bring the agriculture, property, and retail sectors under the tax net.
It’s worth noting that the IMF recently approved a $7 billion bailout package for Pakistan, with the first installment expected by September 30. The loan program will last 37 months, helping to ease pressure on Pakistan’s external payments.