High-level policy discussions between Pakistan and the International Monetary Fund (IMF) on the federal budget for the fiscal year 2025–26 are scheduled to begin tomorrow and will continue until May 23.
These talks follow the conclusion of technical-level negotiations held last week and are aimed at finalizing the fiscal framework ahead of the national budget, expected to be presented on June 2.
According to sources, several proposals will be put forward to provide financial relief to the salaried class. However, the IMF is insisting that any concessions must be balanced by alternative revenue-generating measures to maintain fiscal discipline.
The negotiations come against the backdrop of a recent IMF report that flagged ongoing risks despite improvements in Pakistan’s debt repayment capacity. The report warned that rising tensions with India could disrupt economic reforms, while politically motivated spending and subsidies could threaten macroeconomic stability.
The IMF projects Pakistan’s external financing needs at $19.3 billion for the next fiscal year. This requirement is expected to climb to $19.75 billion in 2026–27 and surge to $31.35 billion in 2027–28 — the highest in the five-year projection. For 2028–29 and 2029–30, the estimated needs are $23.13 billion and $22.16 billion, respectively.
