IMF, Pakistan to continue talks towards agreeing over terms of FY2025-26 Budget

International Monetary Fund (IMF) has announced that it will continue discussions with Pakistan regarding the upcoming fiscal year 2025-26 budget. The announcement came after the IMF mission, led by Nathan Porter, completed its staff-level visit to Islamabad which started on May 19.

The IMF’s visit focused on Pakistan’s recent economic developments, progress under the current IMF programs, and the strategy for the FY2026 budget. In a statement, Porter said that constructive discussions were held with Pakistani authorities on budget plans, economic reforms, and policies under the Extended Fund Facility (EFF) 2024 and the Resilience and Sustainability Facility (RSF) 2025.

He added that Pakistani officials showed commitment to fiscal reforms while ensuring that spending on social programs and national priorities is protected. The goal for FY2026 is to achieve a primary budget surplus of 1.6% of GDP.

Talks also highlighted the need to boost government revenue by improving tax compliance and widening the tax base. The IMF and Pakistan will continue discussions in the coming days to finalize the FY2026 budget.

The mission also discussed ongoing energy sector reforms. These are aimed at making Pakistan’s power sector more financially stable and affordable. Structural reforms in other sectors were also part of the conversation, with the goal of creating a stronger, fairer environment for investment and business growth.

The IMF noted that maintaining a tight, data-driven monetary policy is essential. This will help bring inflation within the State Bank’s target range of 5–7%. The Fund also stressed the importance of rebuilding Pakistan’s foreign exchange reserves, ensuring a stable currency market, and allowing for flexible exchange rates to withstand external economic shocks.

The IMF thanked Pakistan’s federal and provincial officials for their cooperation and said it would stay engaged with Pakistani authorities. The next IMF mission for review under the EFF and RSF is expected in the second half of 2025.

Meanwhile, Pakistan’s Ministry of Finance has confirmed that the federal budget for FY2025-26 will be presented in the National Assembly on June 10, with the Economic Survey to be released on June 9. Earlier, the budget was expected on June 2 but has now been delayed.

Additionally, an IMF delegation led by Jihad Azour met with President Asif Ali Zardari in Islamabad. Finance Minister Muhammad Aurangzeb, Senator Saleem Mandviwalla, and senior officials also attended the meeting. Both sides discussed Pakistan’s economic conditions and ongoing cooperation under the IMF programs.