The International Monetary Fund (IMF) has urged Pakistan to continue its fiscal consolidation policies in the upcoming budget by expanding the tax net, improving tax administration, enhancing expenditure efficiency and strengthening public financial management at both federal and provincial levels.
An IMF mission led by Eva Petrova visited Islamabad from May 13 to May 20, 2026, where discussions were held on Pakistan’s economic situation, reform progress and budget strategy for fiscal year 2026-27. Both sides agreed to continue negotiations on the federal budget in the coming days.
According to the IMF, the discussions focused on recent economic developments, the impact of disruptions caused by the ongoing Middle East conflict, and progress under the Extended Fund Facility (EFF) and Resilience and Sustainability Facility (RSF) programs.
At the conclusion of the visit, mission chief Eva Petrova said the IMF held constructive discussions with Pakistani authorities regarding economic reforms and fiscal planning for FY2026-27.
She noted that Pakistan has reaffirmed its commitment to achieving a primary budget surplus equivalent to 2 percent of GDP in the next fiscal year to further strengthen fiscal stability and improve economic resilience.
The IMF stated that gradual fiscal consolidation would be supported through measures aimed at broadening the tax base, improving revenue administration, increasing efficiency in government spending and enhancing public financial management systems across federal and provincial governments.
Officials from both sides are expected to continue budget-related negotiations in the coming days ahead of the announcement of the federal budget for FY2026-27.
