The International Monetary Fund (IMF) has concluded its visit to Pakistan following discussions with federal and provincial authorities on economic reforms, fiscal targets, and the budget framework for FY2027 under the country’s ongoing IMF-supported programmes.
In a statement issued early Thursday, the IMF said its mission visited Islamabad from May 13 to May 20 to review recent economic developments, implementation of reforms, and Pakistan’s budget strategy for the next fiscal year.
The mission, led by Iva Petrova, held what it described as “constructive discussions” with Pakistani authorities on key economic challenges, including the impact of Middle East tensions, fiscal planning, and progress under the Extended Fund Facility (EFF) and the Resilience and Sustainability Facility (RSF).
Petrova said the Pakistani authorities reaffirmed their commitment to achieving a primary surplus target of 2 per cent of GDP in FY2027 to strengthen fiscal sustainability and economic resilience.
She noted that gradual fiscal consolidation would be supported through measures aimed at broadening the tax base, improving tax administration, enhancing expenditure efficiency, and strengthening public financial management at both federal and provincial levels. Discussions on the FY2027 federal budget are expected to continue in the coming days.
According to the IMF, the State Bank of Pakistan (SBP) also reiterated its commitment to maintaining an appropriately tight monetary policy stance to anchor inflation expectations while closely monitoring the potential secondary impact of rising energy prices.
The Fund emphasised that exchange rate flexibility should continue to act as a key shock absorber, alongside efforts to deepen the foreign exchange interbank market.
The discussions also covered structural reforms in the energy sector, state-owned enterprises, product market liberalisation, and financial sector improvements aimed at supporting sustainable economic growth and attracting quality private investment.
Progress under the RSF programme was also reviewed, particularly initiatives related to disaster risk financing, climate-sensitive budgeting and investment planning, and reforms in power subsidies.
The IMF appreciated the “constructive engagement, strong collaboration, and continued commitment to sound policies” demonstrated by Pakistan’s federal and provincial authorities.
The next IMF mission, expected to include the Article IV consultation along with EFF and RSF reviews, is likely to take place in the second half of 2026.
Earlier this month, the IMF approved the latest review of Pakistan’s reform programme, clearing the way for disbursements of approximately $1.1 billion under the EFF and $220 million through the RSF. This brings total disbursements under both arrangements to nearly $4.8 billion.
Meanwhile, the IMF has reportedly set Pakistan’s federal revenue target for FY2026-27 at Rs17.145 trillion. Provinces have also been asked to increase their revenue contribution by at least Rs400 billion through improved tax collection in agriculture, property, and services sectors.
