IMF has urged Pakistan to continue its fiscal stability policies by expanding the tax net, improving tax administration, and enhancing expenditure efficiency in the upcoming Budget 2026-27. The recommendations were made during recent discussions held in Islamabad.
An IMF mission led by Eva Petrova visited Islamabad from May 13 to May 20, 2026, to review Pakistan’s economic progress and budget strategy for the next fiscal year. Both sides agreed to continue budget-related negotiations in the coming days.
During the meetings, officials discussed recent economic developments, reform measures, and the government’s fiscal strategy under the Extended Fund Facility (EFF) and Resilience and Sustainability Facility (RSF) programs.
According to Eva Petrova, the talks focused on the impact of ongoing disruptions caused by tensions in the Middle East, preparations for the fiscal year 2027 budget, and progress on structural reforms agreed under IMF programs.
Pakistan also reaffirmed its commitment to achieving a primary surplus equal to 2 percent of GDP in fiscal year 2027. The IMF believes this target will strengthen fiscal stability and improve the country’s economic resilience in the coming years.
The global lender emphasized that gradual fiscal consolidation should be supported through broader tax collection, stronger tax administration, improved spending efficiency, and better public financial management at both federal and provincial levels.
Negotiations between Pakistan and the IMF on the Budget 2026-27 framework are expected to continue in the upcoming days as both sides work toward finalizing key economic targets and reform commitments.
