ISLAMABAD, May 24 — An International Monetary Fund (IMF) mission, led by Nathan Porter, concluded its staff visit to Islamabad, which began on May 19, to assess recent economic developments, fiscal progress, and budget plans for FY2026. Pakistan is expected to present the FY26 budget on June 10.
In a statement, Porter confirmed that the IMF held “constructive discussions” with Pakistani authorities on the FY2026 budget strategy and reform agenda, which is backed by the 2024 Extended Fund Facility (EFF) and the 2025 Resilience and Sustainability Facility (RSF).
The authorities reaffirmed their commitment to fiscal consolidation, targeting a primary surplus of 1.6% of GDP in FY26, while preserving essential social and development expenditures. Discussions centred on broadening the tax base and improving compliance to boost revenues, while keeping spending efficient and focused.
The IMF also reviewed progress on energy sector reforms aimed at reducing inefficiencies and lowering the financial burden of the power system. Broader structural reforms to improve the business climate and foster sustainable growth were also discussed.
Porter highlighted the importance of maintaining a tight, data-driven monetary policy to control inflation within the State Bank’s 5–7% medium-term target. He also stressed the need to rebuild foreign exchange reserves, maintain a functional FX market, and allow greater currency flexibility to strengthen external resilience.
The mission noted that Pakistan had met all targets for the previous review and emphasized that continued adherence to EFF conditions was crucial for future disbursements.
The IMF team expressed appreciation for the cooperation of federal and provincial authorities and confirmed that discussions on the FY26 budget will continue. The next review mission under the EFF and RSF is scheduled for the second half of 2025.
