IMF has banned provincial subsidies on electricity and gas throughout the 37-month loan programme
IMF wants Pakistan to end price controls on key agricultural products. The International Monetary Fund (IMF) has placed a significant condition on Pakistan, prohibiting the federal and provincial governments from setting support prices for agricultural products such as wheat, sugarcane, and cotton.
This requirement, part of a broader $7 billion bailout package, aims to reduce government spending and limit provincial control over subsidies.
Currently, the government manages prices for key crops and inputs, including fertilisers. However, under the IMF’s directive, these interventions must be gradually phased out.
By June 2026, the government will no longer be allowed to set prices or conduct procurement operations that affect the private sector, starting with the current Kharif crop season.
Additionally, the IMF has banned provincial subsidies on electricity and gas throughout the 37-month loan programme.
According to Profit, the government will also be restricted to buying commodities solely for its own use, selling them at market prices to ensure full cost recovery. This move is intended to prevent price distortions and supply chain disruptions caused by previous government interventions.
While the IMF has demanded of the Pakistan government to get $12 billion loan rolled over by next week to secure the bailout package. Besides, the fund has also asked the country to meet the revenue shortfall in the month of September.
According to finance ministry sources, the ministry held a virtual dialogue with the IMF but it could not seek an external financing approval deadline from the IMF Executive Board.
The sources disclosed the matter of revenue shortfall also came under discussion during the meeting. In addition, the finance ministry officials also briefed the fund about Pakistan’s efforts for getting the debt rolled over from friendly countries.
The IMF has asked Pakistan to get the task done by next week.
The fund has also demanded that the revenue shortfall be addressed in September.
The fund further stated that if the revenue shortfall was not plugged then the fund will seek a plan from FBR on how it proposes to achieve the revenue target.
