IMF, Pakistan to continue talks towards agreeing over terms of budget
Business
The next mission associated with the next EFF and RSF reviews is expected in the second half of 2025
ISLAMABAD (Dunya News) – The International Monetary Fund (IMF) said it would continue discussions with Pakistan authorities towards agreeing over terms of the budget for the fiscal year 2025-26.
The global lender has issued a statement after its mission, led by Nathan Porter, concluded its staff visit to Islamabad which began on May 19. The staff visit focused on recent economic developments, programme implementation, and the budget strategy for fiscal year (FY) 2026.
The Ministry of Finance has announced that the federal budget will be presented on June 10 instead of June 2.
Porter in a statement 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)”.
He said the Pakistani authorities reaffirmed their commitment to fiscal consolidation while safeguarding social and priority expenditures, aiming for a primary surplus of 1.6 percent of GDP in FY2026.
Discussions focused on actions to enhance revenue—including by bolstering compliance and expanding the tax base—and prioritize expenditure. We will continue discussions towards agreeing over the authorities’ FY26 budget over the coming days.
Discussions also covered ongoing energy sector reforms aimed at improving financial viability and reducing the high-cost structure of Pakistan’s power sector as well as other structural reforms which will help foster sustainable growth and promote a more level playing field for business and investment.
The authorities also emphasized their commitment to ensuring sound macroeconomic policy making and building buffers.
In this context, maintaining an appropriately tight and data-dependent monetary policy remains a priority to ensure inflation is anchored within the central bank’s medium-term target range of 5–7 percent.
At the same time, rebuilding foreign exchange reserve buffers, preserving a fully functioning FX market, and allowing for greater exchange rate flexibility are critical to strengthening resilience to external shocks.
The IMF mission thanked the federal and provincial authorities for their hospitality, constructive discussions, and strong collaboration and commitment to sound policies.
The IMF team will remain engaged and continue its close dialogue with the authorities. The next mission associated with the next EFF and RSF reviews is expected in the second half of 2025.
Govt to present budget for FY2025-26 on June 10
Meanwhile, the federal budget for the upcoming fiscal year 2025-26 will be presented on June 10.
A spokesperson for the Ministry of Finance confirmed that the federal budget would be presented in the National Assembly on June 10, while the Economic Survey would be released on June 9.
Previously, the budget was scheduled to be presented on June 2.
Earlier, a delegation of the International Monetary Fund (IMF) led by Jihad Azour called on President Asif Ali Zardari in Islamabad on Friday.
Finance Minister Muhammad Aurangzeb, Senator Saleem Mandviwalla, and senior officials were also present.
During the meeting, views were exchanged on country's overall economic situation and the ongoing IMF programme.
