Pakistan and the International Monetary Fund (IMF) have reached an agreement to tighten monetary policy, with a 2% primary surplus target for fiscal year 2027 (FY27) remaining central to the budget plan. The agreement was reached during an IMF mission that concluded its visit from May 13 to May 20, 2026, with budget talks set to continue virtually.
As part of the agreement, federal and provincial governments are expected to raise over Rs860 billion in additional revenue. The Federal Board of Revenue (FBR) target has been set to increase tax collection, though specific figures were not disclosed in the verified reports.
The IMF mission emphasized the need for fiscal consolidation and structural reforms to stabilize Pakistan's economy. The talks focused on measures to broaden the tax base and improve energy sector reforms, which are critical for the country's economic recovery.
Pakistan's economy has faced significant challenges, including high inflation and a balance of payments crisis. The IMF program aims to restore macroeconomic stability and promote sustainable growth. The virtual discussions will continue to finalize the budget details ahead of the next fiscal year.
