Islamabad: The Ministry of Finance has clarified that the structural benchmarks under Pakistan's IMF Extended Fund Facility (EFF) are fully aligned with the government's ongoing reform agenda and do not represent 'new conditions,' as suggested in some recent commentary. The ministry stated that these measures are part of a phased, medium-term reform framework agreed with the IMF and are extensions or logical progressions of reforms already initiated by the Government of Pakistan.
According to the Finance Division, the IMF's EFF is designed to support countries in implementing structural reforms over time through a sequenced and step-by-step approach. Each program review builds on previous actions to ensure that the agreed policy objectives are achieved. In this regard, the Memorandum of Economic and Financial Policies (MEFP) finalized after the Second Review supplements earlier MEFPs and reflects continuity rather than the introduction of abrupt measures.
The ministry explained that during negotiations, the government presents its own reform initiatives, which are incorporated into the MEFP when they align with program objectives. As a result, many of the benchmarks included in the latest MEFP originate from reforms already underway and are not externally imposed.
Clarifying the measures recently labeled as 'new conditions,' the ministry noted that public disclosure of asset declarations of civil servants has been part of the EFF since May 2024, with the current benchmark being the second step following amendments to the Civil Servants Act, 1973. Similarly, strengthening the operational effectiveness of the National Accountability Bureau and empowering provincial anti-corruption establishments are continuations of earlier commitments linked to governance and AML/CFT reforms.
On remittances, the Finance Division highlighted that efforts to curb informal channels have already led to a 26 percent year-on-year increase from FY24 to FY25, with further growth projected. Measures to remove bottlenecks in cross-border payments, developed in coordination with the State Bank of Pakistan, have now been incorporated into the MEFP.
The ministry added that development of the local currency bond market, deregulation of the sugar industry, and preparation of a comprehensive reform roadmap for the Federal Board of Revenue are government-led initiatives that align with EFF objectives. It said privatization of power distribution companies has been a core component of the program since its inception and is being implemented in phases, while regulatory reforms under the Companies Act and SEZ framework follow earlier completed benchmarks.
Regarding revenue contingency measures, the Finance Division emphasized that such safeguards have been part of the MEFP framework since May 2024 to address potential shortfalls and ensure fiscal stability.
In conclusion, the Ministry of Finance reiterated that the measures outlined in the latest MEFP represent continuity, sequencing, and deepening of Pakistan's agreed reform agenda under the IMF EFF, rather than the imposition of sudden or unprecedented conditions.