Nathan Porter, who led the IMF mission said, the teams held discussions with the Pakistan authorities on their FY26 budget proposals and broader economic policy and reform agenda supported by the 2024 Extended Fund Facility (EFF) and 2025 Resilience and Sustainable Facility (RSF).
The IMF said the Pakistan authorities reaffirmed their commitment to fiscal consolidation, while safeguarding social and priority expenditures, aiming for a primary surplus of 1.6% of GDP in FY26. “Discussions focused on actions to enhance revenue—including by bolstering compliance and expanding the tax base—and prioritize expenditure,” Porter said.The discussions towards agreeing over the authorities FY26 budget will continue over the coming days, he added.
Porter said 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%. “At the same time rebuilding foreign exchange reserve buffers, preserving a fully functioning forex market, and allowing for greater exchange rate flexibility are critical to strengthening resilience to external shocks,” he added.
The next missions associated with the next EFF and RSF reviews is expected in the second half of 2025, the IMF said.
Earlier this month, the IMF approved two financing decisions for Pakistan, disbursing around $2.4 billion under its economic reform and climate resilience programmes. This came amid the India-Pakistan conflict after India launched Operation Sindoor against terrorist camps in Pakistan post the Pahalgam terrorist attack.
India raised strong objections to the IMF’s continued financial support to the country, warning that repeated bailouts risk enabling state-sponsored cross-border terrorism and undermining global financial integrity.
Last week, IMF imposed 11 new conditions on Pakistan for the release of the next tranche of its bailout programme and warned that tensions with India could heighten risks to the scheme’s final, external and reform goals.
