ISLAMABAD – The Ministry of Finance has clarified that the reforms being implemented under the IMF’s Extended Fund Facility (EFF) programme are neither new nor abruptly imposed conditions, but rather a continuation of a pre-agreed reform agenda outlined in the Memorandum of Economic and Financial Policies (MEFP).
In a statement issued on Sunday, the ministry explained the background, continuity, and phased nature of the reform measures agreed under the IMF’s EFF programme.
The statement emphasized that the measures being described as “new conditions” are neither sudden nor unexpected. Instead, they are part of a medium-term reform strategy mutually agreed upon by the Government of Pakistan and the IMF, many elements of which had already been initiated by the government itself.
Under the IMF’s Extended Fund Facility, member countries are enabled to implement structural reforms over the medium term to achieve defined policy objectives. These reforms are not enforced in a single step but are introduced gradually over the duration of the programme. Accordingly, EFF measures are divided into logical phases.
The Ministry of Finance stated that with each programme review, new actions are incorporated to progressively achieve the final objectives set at the outset. In this context, the MEFP finalized after the second review is a continuation and completion of the MEFP agreed upon during the first review.
Similarly, during negotiations with the IMF, the Government of Pakistan presents its own proposed reform policies. Where the IMF determines that these reforms support the achievement of EFF objectives, they are included in the MEFP. As a result, several structural measures in the latest MEFP are reforms that the government had already initiated or was actively working on.
Regarding the alleged “new conditions” discussed in the media, the ministry stressed that certain facts must be kept in view. The publication of asset declarations of civil servants has been part of the MEFP since the launch of the EFF programme in May 2024.
According to the statement, the current structural benchmark is the logical next step following amendments to the Civil Servants Act, 1973, which have already been successfully completed. The government had also previously agreed to strengthen the effectiveness of NAB and enhance coordination with other investigative bodies, particularly provincial anti-corruption institutions.
The ministry further clarified that the preparation of action plans for high-risk institutions is part of this same reform continuum and is being pursued alongside pre-agreed reforms identified prior to the governance and corruption diagnostic report.
Providing financial information to provincial institutions for investigating the financial aspects of corruption is part of the Anti-Money Laundering and Counter-Terrorism Financing (AML/CFT) reforms, which have been included since the start of the EFF programme. The ministry noted that remittances are critically important for Pakistan’s external financial stability.
After discouraging informal channels, remittances increased by 26 percent in fiscal year 2025 compared to fiscal year 2024, with a further 9.3 percent increase projected for fiscal year 2026. The government, in coordination with the State Bank of Pakistan, is removing barriers to reduce remittance costs, and the IMF has incorporated these measures into the MEFP to further strengthen them.
The Ministry of Finance also stated that the IMF staff report issued in May 2025 recommended a comprehensive study of barriers in the domestic bond market to expand the investor base. This recommendation has now been included in the programme as a structural benchmark.
Similarly, reforms in the sugar sector are a government-led initiative. The Prime Minister’s Office has formed a task force headed by the Minister for Energy to develop recommendations, in consultation with provinces, for full deregulation of the sugar market and a national policy. As this aligns with the EFF’s objective of reducing government intervention in commodity markets, the IMF has included it in the MEFP.
The ministry added that a comprehensive reform roadmap for the Federal Board of Revenue (FBR) has been introduced as part of the government’s broader revenue-enhancement agenda, personally led by the prime minister.
Over the past year, key steps have been taken, including approval of a transformation plan, establishment of a Tax Policy Office, and improvements in compliance risk management. This structural benchmark is intended to further strengthen these reforms. The separation of tax policy from FBR operations following the creation of the Tax Policy Office was a major step, and the preparation of a medium-term tax reform strategy is a natural continuation of this process.
According to the Ministry of Finance, the privatization of electricity
