IMF Staff Concludes Visit to Pakistan
IMF News, May 23, 2025
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- Published: May 23, 2025
Mission scope and timing
- IMF staff visit to Islamabad led by Mr. Nathan Porter began on May 19, 2025 and concluded with an end-of-mission statement on May 23, 2025.
- The staff visit focused on recent economic developments, program implementation, and the budget strategy for fiscal year (FY) 2026.
- The mission is associated with the 2024 Extended Fund Facility (EFF) and the 2025 Resilience and Sustainability Facility (RSF).
Fiscal policy and FY2026 budget intent
- Authorities reaffirmed commitment to fiscal consolidation while safeguarding social and priority expenditures.
- Budget target discussed: aiming for a primary surplus of 1.6 percent of GDP in FY2026.
- The IMF and authorities will "continue discussions towards agreeing over the authorities’ FY26 budget over the coming days."
Revenue measures and expenditure prioritization
- Discussions focused on actions to enhance revenue, including:
- bolstering compliance
- expanding the tax base
- Discussions also emphasized the need to prioritize expenditure to support the fiscal consolidation objective.
Monetary policy, inflation, and reserves
- Authorities emphasized commitment to sound macroeconomic policy making and building buffers.
- Monetary policy guidance: maintaining an appropriately tight and data-dependent monetary policy to ensure inflation is anchored within the central bank’s medium-term target range of 5–7 percent.
- External sector guidance: rebuilding foreign exchange reserve buffers, preserving a fully functioning FX market, and allowing for greater exchange rate flexibility to strengthen resilience to external shocks.
Energy sector and structural reforms
- Discussions covered ongoing energy sector reforms aimed at:
- improving financial viability of the power sector
- reducing the high-cost structure of Pakistan’s power sector
- Other structural reforms were discussed to help foster sustainable growth and promote a more level playing field for business and investment.
Engagement, collaboration, and next steps
- The IMF mission thanked federal and provincial authorities for hospitality, constructive discussions, and strong collaboration and commitment to sound policies.
- The IMF team will remain engaged and continue its close dialogue with the authorities.
- The next mission associated with the next EFF and RSF reviews is expected in the second half of 2025.
Press Release No. 25/160 — IMF Communications Department, Islamabad, May 23, 2025.