The International Monetary Fund (IMF) has started online discussions with the Government of Pakistan about the country’s next budget. |
Islamabad: The International Monetary Fund (IMF) has started online discussions with the Government of Pakistan about the country’s next budget for the fiscal year 2025-26. These virtual talks began on Wednesday and will continue until May 16.
Originally, the IMF team was supposed to visit Islamabad in person this week. However, their travel was delayed due to security concerns in the region, especially because of the ongoing India-Pakistan tensions that disrupted air travel.
In-Person Visit Planned for Weekend
Despite the delay, sources say the IMF mission still plans to come to Islamabad over the weekend, possibly on Saturday. The team is expected to stay in the capital until May 23, depending on the security situation.
Officials from both the IMF and Pakistan’s Ministry of Finance have not officially commented on the travel changes.
New IMF Mission Chief Appointed
The IMF has appointed a new mission chief to Pakistan — Iva Petrova from Bulgaria. She has previously worked with the IMF in countries like Armenia, Israel, Iceland, and Latvia. Petrova holds a PhD in economics from Michigan State University.
She will join the ongoing talks alongside the outgoing mission chief, Nathan Porter, who held the post for a long time. It is unclear if both will attend all rounds of discussions.
Strict Budget Targets for Pakistan
The Pakistani government is expected to announce its federal budget on June 2. The IMF wants the country to plan a tight budget for 2025-26, asking for a primary budget surplus equal to 1.6 per cent of GDP. This means Pakistan must collect around Rs 2 trillion more than its non-interest expenses.
The Federal Board of Revenue (FBR) has been given a high tax collection goal of Rs 14.3 trillion, or about 11 per cent of GDP. The IMF will check whether the government has solid plans to meet this big target.
Progress on Past Targets Praised
Pakistan has already met some important IMF conditions. It reported a primary surplus of Rs 3.5 trillion, which is 2.8 per cent of GDP, better than the Rs 2.7 trillion target. The provinces also met their revenue and cash surplus goals.
The total budget deficit is likely to be around 5.1 per cent of GDP, or Rs 6.7 trillion. The final size of the federal budget is still being worked out, especially after a review of defence needs, but is expected to stay under Rs 18 trillion.
(With PTI Inputs)
