Pakistan and the International Monetary Fund have agreed to continue discussions in the coming days regarding the budget for fiscal year 2026-27, while the IMF emphasized the need for expanding the tax net, improving tax collection, and continuing economic reforms.
In a statement issued after concluding her visit to Pakistan, IMF Mission Chief Eva Petrova said the IMF delegation held detailed and constructive discussions with Pakistani authorities on the current economic situation, reform measures, and budget strategy for the upcoming fiscal year.
According to the statement, the talks also reviewed the possible economic impact of ongoing tensions in the Middle East and progress under the Extended Fund Facility and Resilience and Sustainability Facility reform agenda.
The IMF stated that Pakistani authorities reaffirmed their commitment to maintaining a primary budget surplus target of 2 percent of GDP for fiscal year 2027.
Reports said both sides agreed on expanding the tax base, improving the tax system, reforming public expenditures, and strengthening fiscal management at both federal and provincial levels to achieve the target.
The State Bank of Pakistan also expressed its commitment to maintaining a tight monetary policy to control inflation, while exchange rate flexibility was described as important for absorbing economic shocks.
The negotiations also included discussions on energy sector reforms, privatization and improvement of state-owned enterprises, financial sector reforms, and the promotion of private investment.
In addition, both sides reviewed climate risk management measures, inclusion of environmental factors in budget planning, and electricity subsidy reforms under the Resilience and Sustainability Facility programme.
The IMF mission appreciated the cooperation of federal and provincial authorities, constructive engagement, and commitment to improved economic policies, while agreeing to continue negotiations.
