ISLAMABAD (Mudassar Ali Rana) – Pakistan and the International Monetary Fund (IMF) have reached agreement on a fresh set of structural benchmarks aimed at strengthening economic stability and governance, according to informed sources.
Under the deal, 11 broad reforms will be implemented over the next fiscal year across fiscal management, administration, social protection, energy, and trade sectors. Authorities have also set strict timelines for institutions to ensure timely execution.
The agreement states that the federal budget for 2026–27 will be prepared in line with IMF programme targets and subsequently approved by Parliament. In tax administration, the Federal Board of Revenue (FBR) will upgrade its audit case selection system to meet international standards.
To improve transparency and competition in public procurement, amendments will be made to the Public Procurement Regulatory Authority rules, removing preferential treatment for state-owned enterprises. Governance reforms will also include changes to the National Accountability Bureau law to ensure a more transparent, merit-based, and effective accountability system. Provisions related to anti-money laundering and counter-terror financing will also be strengthened.
On the social side, payments under the Benazir Income Support Programme Kafalat initiative will be adjusted on a quarterly and annual basis in line with inflation to protect the purchasing power of low-income households.
In monetary and exchange rate policy, the State Bank of Pakistan will develop a roadmap for gradual liberalisation of the exchange rate regime, a step expected to support investment and economic activity.
The energy sector reforms include a fixed schedule for tariff adjustments. Gas prices will be revised twice—on July 1, 2026, and February 15, 2027—while electricity tariffs will be adjusted annually from January 15, 2027.
To boost trade and investment, the government plans to phase out financial incentives for Special Economic Zones and replace profit-based incentives with a cost-based system through new legislation. A broader legal framework is also being prepared to eliminate such incentives entirely by 2035, in line with IMF recommendations. A unified regulatory registry will also be established to improve transparency and reduce uncertainty for investors.
Sources said these reforms are considered critical for stabilising the economy, narrowing the fiscal deficit, and improving the business environment. After approval by the IMF Executive Board, Pakistan is expected to receive around $1.2 billion in early May.
Officials from the Board of Investment recently informed a parliamentary committee that pilot projects under the revised SEZ framework will begin in 2028. Depending on outcomes, Pakistan may later seek to extend incentives beyond 2035, otherwise they will be phased out in accordance with IMF conditions.