The International Monetary Fund has concluded a staff visit to Pakistan after discussions on recent economic developments, reform implementation, and the budget strategy for fiscal year 2027. In the mission’s concluding statement, the IMF said the talks covered the impact of ongoing disruptions from the conflict in the Middle East, while the authorities reaffirmed a primary surplus target of 2 percent of GDP for FY2027 and plans for gradual fiscal consolidation through broader taxation, stronger tax administration, more efficient spending, and improved public financial management at federal and provincial levels. The discussions also covered monetary, external, and structural policy settings. The State Bank of Pakistan reiterated its commitment to keeping monetary policy appropriately tight to anchor inflation expectations and to monitor possible second-round effects from energy price increases, while exchange rate flexibility was identified as a key shock absorber alongside efforts to deepen the foreign exchange interbank market. The mission also reviewed reforms in the energy sector, state-owned enterprises, product market liberalization, and the financial sector, as well as progress under the Resilience and Sustainability Facility on disaster risk financing, climate integration in budget and investment planning, and power subsidy reform. Discussions on the FY2027 budget will continue in the coming days. The next IMF mission, expected in the second half of 2026, is envisaged to include the Article IV consultation and reviews under the Extended Fund Facility and the Resilience and Sustainability Facility.
International Monetary Fund2026-05-20
International Monetary Fund concludes Pakistan staff visit focused on FY2027 budget strategy and EFF and RSF reform progress
The International Monetary Fund concluded a staff visit to Pakistan after discussions on economic developments, reform implementation, and the fiscal year 2027 budget strategy. Authorities reaffirmed a primary surplus target of 2 percent of GDP and plans for gradual fiscal consolidation through broader taxation, stronger tax administration, more efficient spending, and improved public financial management. The State Bank of Pakistan reiterated its commitment to tight monetary policy and exchange rate flexibility. The mission also reviewed reforms in the energy sector, state-owned enterprises, product markets, the financial sector, and progress under the Resilience and Sustainability Facility.