As Pakistan prepares to finalize its federal and provincial budgets under a new loan program, the International Monetary Fund (IMF) has issued a fresh set of last-minute demands and conditions, sources revealed.

The IMF has called for the full implementation of all agreed reforms in the FY26 budget, requiring written guarantees from provincial governments to cut expenditures and take concrete steps to improve the business environment. The lender is also insisting on a complete ban on electricity and gas subsidies at both the federal and provincial levels.

Provincial governments have been asked to restrict new hiring and undertake more serious right-sizing measures. The IMF further wants the government to build consensus in parliament around budgetary targets and ensure that provinces actively contribute to meeting these goals.

Additionally, the IMF has demanded joint federal-provincial efforts to curb electricity and gas theft and combat smuggling. Provinces have also been directed to include action plans for taxing agricultural income and services in their respective budgets.