IMF Team to Visit Pakistan in May to Finalize FY26 Budget

An IMF mission will visit Islamabad in early May to finalize the 2025-26 budget framework, including taxation measures and expenditure controls. The IMF Executive Board is expected to approve approximately $2.3 billion within six weeks, with disbursement likely between the end of April and the first week of May. Pakistan and the IMF earlier reached a staff-level agreement (SLA) on the first review of the Extended Fund Facility (EFF) for a $1 billion tranche and a new $1.3 billion Resilience and Sustainability Facility (RSF). The government has committed to fiscal consolidation, tax reforms—including agricultural income tax—and strict monetary policies to sustain economic stability. The IMF has revised the Federal Board of Revenue’s (FBR) tax collection target downward to Rs. 12,334 billion for FY 2024-25, raising concerns about next year’s target, which may be set between Rs. 14,500 to Rs. 14,600 billion, requiring additional taxation of Rs. 1,000-1,200 billion. The agreement also prioritizes energy sector reforms, SOE governance, trade liberalization, and climate resilience measures. Prime Minister Shehbaz Sharif called the agreement a milestone and dismissed opposition concerns over a mini-budget. Meanwhile, Finance Minister Muhammad Aurangzeb hinted at issuing Panda Bonds in Yuan to access China’s capital market.