Policy & Economy Desk  |  April 2025  |  4 min read

 

⚡ Quick Takeaways •       Pakistan agrees to 11 new IMF conditions to unlock a $1.2 billion tranche under its $7 billion EFF. •       Gas tariff hikes signalled from July 2026; electricity tariff revisions from January 2027. •       SEZ and STZ fiscal incentives — including CPEC-related benefits — to be fully abolished by 2035. •       NAB Ordinance to be amended by January 2027 with merit-based, competitive leadership selection. •       State Bank to prepare a forex liberalisation roadmap by Q1 2027.

 

Pakistan has formally committed to a fresh set of 11 structural benchmarks demanded by the International Monetary Fund, covering energy pricing, procurement reform, tax governance, social protection and currency market liberalisation. The conditions must be met to secure the fourth tranche of the country’s $7 billion Extended Fund Facility — with an IMF Executive Board review expected next month.

 

📌 Key Stat	📌 Key Stat	📌 Key Stat
$1.2 Billion 4th tranche pending IMF Executive Board review	11 New Structural benchmarks agreed by Pakistan	Rs 19,500 BISP stipend to rise from Rs 14,500 by Jan 2027

 

All 11 Conditions at a Glance

The new benchmarks span a wide policy spectrum — from procurement rules and energy tariffs to anti-corruption governance and foreign exchange reform. Pakistan agreed to the conditions ahead of the IMF Executive Board’s third programme assessment, which will also trigger the fourth tranche release if cleared. The package additionally covers the first review under the Resilience and Sustainability Facility.

 

Condition / Benchmark	Timeline
Amend public procurement rules to end SOE preference	September 2026
Notify semi-annual gas tariff adjustments	From July 2026
Annual electricity tariff revisions	From January 2027
Amend SEZ/STZ legal framework; phase out fiscal incentives	Finance Bill 2026
Abolish all SEZ/CPEC incentives (including CPEC zones)	By 2035
Parliamentary approval of FY2026-27 budget per IMF framework	June 2026
Amend NAB Ordinance with merit-based selection criteria	January 2027
FBR centralised audit case selection regulations	Ongoing / Current FY
Increase BISP stipend from Rs 14,500 to Rs 19,500	January 2027
SBP forex liberalisation roadmap	Q1 2027
Establish Pakistan Regulatory Registry (Federal + ICT)	TBD

 

Energy Tariffs and Procurement Reform

Two of the most consequential near-term commitments relate to energy pricing and public contracts. From July 2026, gas tariffs will be subject to semi-annual adjustments, while electricity tariff revisions will begin on an annual cycle from January 2027. Both mechanisms point to further increases in household and commercial energy bills during fiscal year 2026-27.

On procurement, the government has agreed to amend public procurement rules by September 2026 to strip state-owned enterprises of preferential treatment in contract awards. The change targets the practice of directing large public contracts to SOEs without competitive tendering — a system that has channelled substantial public funds outside open bidding processes.

 

⚠️ Consumer Impact Gas and electricity tariff adjustments from mid-2026 will likely increase household utility bills. Consumers and businesses should anticipate upward revisions to both energy costs as part of IMF-mandated pricing reforms.

 

SEZ Incentives, NAB Reform and Tax Administration

Pakistan has committed to amending the legal frameworks governing Special Economic Zones and Special Technology Zones to phase out profit-based fiscal incentives in line with the 2026 Finance Bill. The transition shifts support toward cost-based mechanisms, with all incentives — including those tied to CPEC-related zones — to be abolished by 2035. The move aligns Pakistan’s SEZ regime with broader IMF concerns about selective tax privileges distorting the investment landscape.

On governance, the National Accountability Bureau Ordinance will be amended by January 2027 to establish qualification criteria and a merit-based, competitive selection process for leadership. The Federal Board of Revenue will also introduce centralised audit case selection regulations to address revenue shortfalls — the FBR is currently under pressure to meet a revised annual collection target of Rs 13.97 trillion by June 30, 2026.

 

ℹ️ CPEC Incentive Phaseout The commitment to abolish CPEC-related SEZ incentives by 2035 is a notable shift. Investors in CPEC zones should assess how the transition from profit-based to cost-based support structures will affect long-term returns.

 

Social Protection, Forex and Regulatory Reform

On the social side, BISP stipends will rise to Rs 19,500 per beneficiary from the current Rs 14,500, effective January 2027 — an increase of roughly 34 per cent that will require a larger budget allocation in the upcoming fiscal year. The expansion reflects a standard IMF condition that adjustment programmes include protections for low-income households against the impact of subsidy cuts and price increases.

The State Bank of Pakistan will prepare a roadmap by Q1 2027 for the gradual liberalisation of the foreign exchange regime, signalling a phased easing of currency market restrictions. Separately, a Pakistan Regulatory Registry covering the federal government and Islamabad Capital Territory will be established to simplify and streamline business regulations — a measure aimed at improving the ease of doing business.

 

✅ BISP Beneficiaries Eligible households currently receiving Rs 14,500 per cycle will see stipends increase to Rs 19,500 from January 2027. No changes to existing eligibility criteria have been announced alongside this commitment.

 

DISCLAIMER: All information in this article is based on publicly available data and official statements. This content is intended for general informational purposes only.