The International Monetary Fund (IMF) announced that discussions on Pakistan’s fiscal year 2026 (FY26) budget will continue in the coming days, following the conclusion of a staff-level mission led by Nathan Porter.
The mission’s conclusion comes hours after the federal government announced it would now present the Budget 2025-26 on June 10, a delay from the earlier announced date of June 2, showing that it was struggling to finalise fiscal targets with the IMF.
The Economic Survey FY2025, a report card of the performance of various sectors of the economy for the outgoing fiscal year, will be unveiled a day before the budget, on June 9, the finance ministry said.
The delegation, which visited Islamabad beginning May 19, held meetings with Pakistani authorities to assess recent economic developments, budget proposals, and the broader reform agenda under the 2024 Extended Fund Facility (EFF) and the 2025 Resilience and Sustainability Facility (RSF).
In a statement at the end of the visit, Porter said: “We held constructive discussions with the authorities on their FY2026 budget proposals and broader economic policy, and reform agenda supported by the 2024 Extended Fund Facility (EFF) and the 2025 Resilience and Sustainability Facility (RSF).”
The Pakistani authorities reaffirmed their commitment to fiscal consolidation while safeguarding social and priority spending. The FY26 budget targets a primary surplus of 1.6% of GDP.
Revenue measures under discussion, the Washington-based lender’s statement said, include improved compliance and an expanded tax base, alongside prioritised expenditure.
The IMF and Pakistani officials also reviewed reforms in the power sector aimed at improving financial viability and reducing high costs. Broader structural reforms intended to encourage sustainable growth and level the business playing field were also discussed.
Porter said that the government was committed to “sound macroeconomic policy making,” adding that maintaining a tight, data-driven monetary policy remained crucial to anchoring inflation within the State Bank of Pakistan’s 5-7% medium-term target.
The statement further emphasised the importance of rebuilding foreign exchange reserves, maintaining a fully functioning foreign exchange market, and allowing greater flexibility in the exchange rate to improve external resilience.
The IMF expressed appreciation for the hospitality and cooperation of federal and provincial authorities and confirmed that the next EFF and RSF review mission is expected in the second half of 2025.
