IMF Imposes New Conditions: Inflation Likely to Rise in Pakistan

The International Monetary Fund (IMF) has imposed 11 new conditions on Pakistan as part of its financial assistance program, raising serious concerns about a possible spike in inflation in the coming months. While these measures are aimed at stabilizing Pakistan’s economy, they are likely to create further challenges for the common citizen.

Key IMF Conditions for Pakistan

Some of the major conditions set by the IMF include:

• Approval of a Rs. 17.6 trillion budget for the fiscal year 2025–26.
• Increase in power surcharges to help repay circular debt.
• Lifting restrictions on the import of used vehicles older than three years.
• Implementation of tax reforms on agricultural income.

These measures aim to expand Pakistan’s tax base and reduce the fiscal deficit, but they may also push prices higher in essential sectors like electricity, transport, and food.

Inflation Outlook

Although overall inflation in Pakistan fell to 0.3% in April 2025, the prices of most essential goods and services are still rising fast, with core inflation staying close to 9%. According to IMF estimates, inflation is expected to rise in the coming months due to subsidy removals and increased taxation.

Economic Growth Forecast

In addition to inflation concerns, the IMF has also revised Pakistan’s GDP growth forecast for the fiscal year 2024–25, lowering it from 3.2% to 2.6%. The slowdown is attributed to weak performance in the first half of the fiscal year and global economic uncertainty.

What Lies Ahead

Pakistan faces a difficult balancing act—complying with IMF reforms while protecting vulnerable populations from rising living costs. The government will need to introduce smart, people-friendly policies that maintain economic stability while minimizing the impact on everyday citizens.