Sun May 18 13:40:00 UTC 2025: **Summary:**

The IMF has imposed 11 new conditions on Pakistan for the release of its next bailout tranche, bringing the total to 50. These conditions include parliamentary approval of a new budget, implementing agriculture income tax laws in provinces, publishing a governance action plan, and phasing out incentives for Special Technology Zones. Several conditions target the energy sector, requiring tariff adjustments and the removal of a cap on the debt service surcharge on electricity. The IMF also warned that tensions with India could heighten risks to Pakistan’s fiscal and economic goals, particularly after recent military activity. Lastly, the IMF wants restrictions removed from importing used cars.

**News Article:**

**IMF Slaps Pakistan with 11 New Conditions for Bailout, Cites India Tensions**

Islamabad – The International Monetary Fund (IMF) has placed Pakistan under increased pressure by imposing 11 new conditions for the release of the next tranche of its crucial bailout program. This brings the total number of conditions to 50, raising concerns about the already burdened Pakistani economy.

According to an IMF report released over the weekend, the new conditions include securing parliamentary approval for the fiscal year 2026 budget, implementation of new agriculture income tax laws by provinces by June this year, and the publication of a governance action plan. Significant changes are also demanded in the energy sector, including the removal of the maximum Rs3.21 per unit cap on the debt service surcharge on electricity bills, a measure aimed at addressing inefficiencies within the sector but likely to impact consumers.

In what could be welcome news to car buyers, the IMF is pushing for the lifting of restrictions on the commercial importation of used motor vehicles, initially for vehicles less than five years old.

The IMF also expressed concerns about rising tensions between India and Pakistan, stating that these tensions “could heighten risks to the fiscal, external and reform goals of the program.” This warning comes in the wake of recent military actions, including India’s “Operation Sindoor” and subsequent retaliatory attempts by Pakistan, which prompted an understanding to de-escalate the conflict only on May 10.

The report also highlights a proposed increase in Pakistan’s defense budget, which is reported as lower in the report than the government is planning after the confrontation with India early this month.

The implementation of these new conditions is expected to be a significant challenge for the Pakistani government, which is already grappling with economic instability. The deadline for some of the conditions, particularly those related to provincial tax implementation and the energy sector, is set for this June, placing added urgency on the reforms.

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