Pakistan has reaffirmed its commitment to fiscal consolidation and the International Monetary Fund will conduct its next funding review in the second half of this year, the multilateral agency said.
The authorities are aiming for a primary surplus of 1.6 per cent of gross domestic product in fiscal year 2026, the IMF said in a statement after the conclusion of its staff visit to Islamabad led by Nathan Porter. “Maintaining an appropriately tight and data-dependent monetary policy remains a priority to ensure inflation is anchored within the central bank’s medium-term target range of 5–7 per cent,” it said.
Earlier this month, the lender’s executive board approved a roughly $1 billion loan to Pakistan. The funds, crucial to bolster the nation’s foreign exchange reserves and buffer its fragile economy, came despite India’s opposition amid border tensions between the neighbours.
The IMF has tightened loan conditions for Pakistan for future funding, and warned of risks to its economy from US tariff policies and escalating tensions with India.
The discussions focused on actions to boost revenue and prioritise expenditure, the IMF said, adding they will continue talks toward “agreeing” over Pakistan’s budget over the coming days. The two sides also discussed structural reforms to promote a more level playing field for business and investment.
Rebuilding foreign exchange reserve buffers, preserving a fully functioning FX market and allowing for greater exchange rate flexibility are critical to strengthening resilience to external shocks, the IMF said.
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Published on May 24, 2025