ISLAMABAD: The International Monetary Fund (IMF) has stressed on Pakistan to maintain inflation between 5-7 per cent, saying it would continue discussions over the next fiscal year’s federal budget in the upcoming days as its mission wrapped up its latest visit to the country.
An IMF mission led by Nathan Porter has concluded its staff visit to Islamabad which began on May 19, 2025. The staff visit focused on recent economic developments, programme implementation, and the budget strategy for fiscal year (FY) 2025-26.
At the end of the visit, Porter on Saturday statd that the international money lender held constructive discussions with the authorities on their FY2025-26 budget proposals and broader economic policy.
The IMF Staff talked on reform agenda supported by the 2024 Extended Fund Facility (EFF) and the 2025 Resilience and Sustainability Facility (RSF)m he said, adding that the authorities reaffirmed their commitment to fiscal consolidation while safeguarding social and priority expenditures, aiming for a primary surplus of 1.6 per cent of GDP in FY2026. Discussions focused on actions to enhance revenue—including by bolstering compliance and expanding the tax base—and prioritize expenditure.
“We will continue discussions towards agreeing over the authorities’ FY26 budget over the coming days”, Porter went on to say, adding that the discussions also covered ongoing energy sector reforms aimed at improving financial viability and reducing the high-cost structure of Pakistan’s power sector as well as other structural reforms which will help foster sustainable growth and promote a more level-playing field for business and investment.
The authorities, he said, also emphasized their commitment to ensuring sound macroeconomic policy-making and building buffers. In this context, 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, the IMF mission went on to say.
At the same time, 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, he further said.
The mission thanks the federal and provincial authorities for their hospitality, constructive discussions, and strong collaboration and commitment to sound policies.
The IMF team will remain engaged and continue its close dialogue with the authorities. The next mission associated with the next EFF and RSF reviews is expected in the second half of 2025.”
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