IMF Confirms Ongoing Budget Talks with Pakistan

The International Monetary Fund (IMF) has announced that discussions on Pakistan’s fiscal year 2026 (FY26) budget will continue in the coming days, following the conclusion of a staff-level visit to Islamabad.

The visit ended shortly after the federal government delayed the Budget 2025-26 presentation to June 10, shifting from the earlier announced date of June 2. The Economic Survey FY2025, summarizing the performance of various economic sectors, will be unveiled on June 9.

Led by IMF Mission Chief Nathan Porter, the delegation arrived on May 19 to assess economic developments, program implementation, and budget strategy. Porter described the discussions as constructive, covering fiscal policy, economic reforms, and Pakistan’s commitment to fiscal consolidation.

The FY26 budget targets a primary surplus of 1.6% of GDP, with revenue measures focusing on tax compliance, base expansion, and expenditure prioritization. Talks also included power sector reforms aimed at financial stability and cost reduction, alongside broader structural reforms to promote sustainable growth.

Porter emphasized the importance of tight, data-driven monetary policy to anchor inflation within the State Bank of Pakistan’s 5-7% medium-term target. The IMF also stressed the need to rebuild foreign exchange reserves, maintain a functional FX market, and allow greater exchange rate flexibility.

The IMF expressed appreciation for Pakistan’s cooperation and confirmed that the next EFF and RSF review mission is expected in the second half of 2025.