ISLAMABAD: Policy-level discussions between Pakistan and the International Monetary Fund (IMF) on the upcoming fiscal year 2025-26 budget proposals are scheduled to begin tomorrow (on Monday) and will run through May 23.
These talks follow the conclusion of technical-level negotiations last week and are intended to finalize critical components of the fiscal framework ahead of the budget announcement set for June 2.
Sources indicate that several proposals aimed at providing relief to the salaried class will be presented, while the IMF is expected to insist on identifying alternative revenue sources to compensate for any tax concessions.
The negotiations come in the wake of the IMF’s latest report on Pakistan’s external financing needs. While the report acknowledges an improvement in the country’s debt repayment capacity, it warns that significant risks remain.
The IMF flagged potential threats such as renewed tensions with India, policy reversals, and politically driven subsidies, all of which could hinder economic reforms and destabilize the country’s fragile financial recovery.
For the next fiscal year alone, Pakistan’s external financing requirement is projected at $19.3 billion. This figure is expected to increase to $19.75 billion in 2026-27, then surge to $31.35 billion in 2027-28 — the highest over the five-year period. The need will further rise to $23.13 billion in 2028-29 and $22.16 billion by 2030.
