Key Takeaways
• The IMF delegation is in Islamabad until May 22 to finalize Pakistan’s 2025–26 federal budget amid economic pressures.
• Pakistan’s external financing gap is projected at nearly $20 billion for the next fiscal year, with deficits continuing through 2027–28.
• No privatisation income is expected until 2030; remittances and current account deficits are forecast to remain stable.
Islamabad, Pakistan – An International Monetary Fund (IMF) delegation has arrived in Islamabad to engage in high-level discussions with Pakistani officials concerning the federal budget for the 2025–26 fiscal year. These talks are pivotal as Pakistan grapples with significant fiscal and external financing pressures, aiming to stabilize the country’s economy.
The Ministry of Finance confirmed that the negotiations will focus on finalizing revenue targets, expenditure plans, and overall budgetary estimates. The IMF team will remain in the capital until May 22, collaborating closely with senior representatives from the Ministry of Finance, the Federal Board of Revenue (FBR), the State Bank of Pakistan (SBP), and the Planning Commission.
Pakistan faces a daunting external financing gap projected to reach $19.75 billion in the upcoming fiscal year, with a similar shortfall expected in 2026–27. By 2027–28, the external financial deficit could exceed Rs 8.8 trillion. Despite anticipated growth in foreign exchange reserves to approximately $23 billion by that time, the country’s economic outlook remains challenging.
Notably, no revenue from privatisation is expected before 2030, according to IMF sources. Meanwhile, remittances are forecast to hold steady at around $36 billion, and the current account deficit is projected to hover near $3.85 billion.
These discussions underscore the critical need for fiscal discipline and strategic economic planning in Pakistan as it navigates complex financial hurdles.
