IMF concludes Pakistan visit after discussion with authorities on reforms, budget for FY2027-28

ISLAMABAD – The International Monetary Fund (IMF) has concluded its latest round of discussions with Pakistan’s Ministry of Finance, reviewing economic performance, fiscal planning for FY2027-28, and ongoing reform implementation under its supported programmes. The IMF said Pakistani authorities have committed to achieving a primary surplus target of 2% of gross domestic product in fiscal year 2027-28, reflecting continued efforts toward fiscal consolidation. The IMF delegation, led by adviser Iva Petrova, visited Islamabad from May 13 to 20, where talks focused on macroeconomic developments, reform progress, and the economic impact of geopolitical tensions in the Middle East. Pakistan is currently participating in a $7 billion IMF-supported programme and recently received approval for approximately $1.32 billion in additional financing. The Fund noted that the State Bank of Pakistan has reiterated its commitment to maintaining a tight monetary policy stance aimed at stabilising inflation expectations, while also monitoring potential spillover effects from energy price adjustments. It further stressed the importance of continued exchange rate flexibility as a buffer against external shocks and called for deeper development of the interbank foreign exchange market. The IMF said discussions also covered key structural reforms, including energy sector adjustments, restructuring of state-owned enterprises, product market reforms, and financial sector improvements designed to attract private investment and support long-term growth. Progress under the Resilience and Sustainability Facility (RSF) was also reviewed, particularly regarding disaster risk financing frameworks, climate integration in public investment planning, and reforms in power subsidies. The Fund appreciated the “constructive engagement and cooperation” of both federal and provincial authorities and confirmed that talks on the FY2027 budget framework will continue in the coming days. A follow-up miss