Haroon Akhtar Khan, Abdul Aleem Khan and Ashfaq Tola discuss IMF-driven tax targets, industrial slowdown, capital flight and whether the upcoming budget can restore investor confidence and provide relief to businesses and the salaried class.
Pakistan is accelerating governance, anti-corruption and state-owned enterprise reforms under its economic reform agenda tied to International Monetary Fund (IMF) commitments, with the lender urging sustained momentum on transparency measures, privatization and institutional restructuring.
In its latest assessment, the IMF said the government is advancing reforms based on recommendations from its Governance and Corruption Diagnostic Report to strengthen policymaking integrity, improve accountability and reduce the state’s footprint in the economy.
The Fund noted that authorities published the prime minister’s Economic Governance Reform Plan in December 2025, setting out 15 reform actions along with key performance indicators, timelines and monitoring mechanisms.
According to the IMF, the government has established an institutional framework to oversee implementation and has initiated coordination with stakeholders, including civil society organizations, through policy dialogue and the publication of semi-annual progress reports.
“To ensure high levels of transparency and accountability and better track the reform plan’s results and impact, the authorities have committed to further develop and publish outcome-based indicators in consultation with key stakeholders,” the IMF said.
The lender said Pakistan is also moving to strengthen the effectiveness and transparency of anti-corruption institutions.
Recently revised civil servant conduct rules are expected to support the online publication of asset declarations submitted by senior federal civil servants by December 2026.
The IMF said further revisions would define limited restrictions on the disclosure of confidential personal information while introducing mechanisms for risk-based and timely verification of declarations.
Authorities are also preparing amendments to the law governing the National Accountability Bureau aimed at improving the independence and transparency of the institution.
The proposed changes, expected to be submitted to Parliament by January 2027, would enhance the appointment process for the NAB chairman and require publication of investigation procedures, prosecution rules and annual enforcement statistics.
The IMF further said Pakistan’s Anti-Corruption and AML/CFT Committee would develop a methodology for corruption risk assessments to help identify vulnerabilities in government institutions and guide mitigation plans.
The report stressed that methodological alignment and effective use of information sources will be essential to ensure credible corruption risk analysis.
The IMF also highlighted broader governance reforms, including the publication of the full review report under the United Nations Convention against Corruption on the website of the United Nations Office on Drugs and Crime.
Additionally, banks’ access to public officials’ asset declarations has been expanded, with usage statistics expected to be published by June 2026.
The Fund said reforms of state-owned enterprises (SOEs) and privatization remain central to reducing the government’s role in the economy while improving governance and operational efficiency.
According to the report, authorities submitted six amendments to laws governing state-owned enterprises to Parliament in January 2026 to align them with the country’s SOE Act. Work is continuing on amendments related to three remaining SOEs with dedicated legal frameworks, which are expected to be completed by August 2026.
The IMF said authorities have also finalized draft amendments to the Sovereign Wealth Fund law, which are expected to clarify the legal mandate of the fund as a holding company and strengthen governance arrangements.
The proposed amendments would ensure that SOEs owned by the sovereign wealth fund remain subject to the same governance and accountability standards as other state-owned entities, while also introducing transparent procurement and divestment procedures and fiscal safeguards.
“The adoption of these amendments without further delay is essential to maintain reform momentum,” the IMF said, adding that operationalization of the sovereign wealth fund will remain on hold until the legal changes are enacted.
The Fund noted progress in the implementation of the SOE governance framework at commercial entities already covered under the law.
Most commercial SOEs have published business plans, corporate intent statements and financial statements compliant with International Financial Reporting Standards, the IMF said.
It stressed that the government’s Central Monitoring Unit, which is now fully staffed, must closely monitor the quality and consistency of reporting by public sector companies.
The report said authorities are also working to incorporate public service obligation agreements for the country’s seven largest SOEs into the FY27 budget, with additional refinement of guidelines underway in consultation with the Asian Development Bank.
The IMF further noted progress in establishing majority-independent boards at commercial SOEs, although appointments at some remaining entities are still pending.
On privatization, the IMF said two transactions have been agreed since October 2025, including the privatization of Pakistan International Airlines.
The Fund urged authorities to build on the momentum by appointing a new financial adviser for the Roosevelt Hotel transaction and moving ahead with private-sector participation in electricity distribution companies, or DISCOs.
“Advancing SOE reforms and the privatization agenda are central to scaling back the state’s footprint while boosting governance, transparency and efficiency of SOEs,” the IMF said.
However, the lender cautioned that sustaining progress would require continued political commitment, stronger institutional capacity and protection against any reversal or weakening of reforms already implemented.
The hosts are 110-3, holding a 156-run lead after bowling Pakistan out for 232 in the first-innings
