The International Monetary Fund (IMF) has reportedly demanded that Pakistan implement six strict conditions to make its sovereign wealth fund fully operational, according to official sources in Islamabad.
The conditions are aimed at strengthening financial discipline and limiting the fund’s exposure to riskier economic activities. Under the proposed framework, the sovereign wealth fund would be barred from taking loans or any form of borrowing, providing guarantees or collateral, or extending credit to public or private entities.
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It would also be prohibited from participating in public-private partnership projects, acquiring financial assets or instruments, or receiving any form of financial support from the central bank or other government institutions.
In addition, the IMF has reportedly insisted that the fund must not engage in investment activities involving financial institutions or state-owned enterprises that could expose it to contingent liabilities or fiscal risks.
These requirements are expected to be incorporated into law as structural benchmarks following approval of the 2026–27 federal budget.
Meanwhile, the Pakistani government has already forwarded six proposed amendments related to state-owned enterprises (SOEs) to parliament for approval. The changes aim to align existing legislation with the State-Owned Enterprises Act and improve governance standards.
Officials say the broader reform agenda is intended to enhance transparency, reduce fiscal pressures on the government, and ensure that public sector investment entities operate within clearly defined legal boundaries.
The IMF’s push comes as Pakistan continues to implement structural reforms under its ongoing economic adjustment programme, which focuses on fiscal consolidation, state-owned enterprise restructuring, and improved financial oversight.
Economists note that sovereign wealth funds can play a stabilising role in national economies, but only when managed with strong governance frameworks that prevent excessive risk-taking or misuse of public resources.
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The proposed restrictions indicate a cautious approach by international lenders, who are seeking to ensure that Pakistan’s financial institutions operate within sustainable and transparent limits while reducing long-term debt vulnerabilities. Further discussions between IMF officials and Pakistani authorities are expected in upcoming review meetings