IMF says next Pakistan funding review expected in second half of 2025

The IMF's priority remains anchoring inflation within the central bank's medium-term target range of 5–7 percent, the statement said.

A view of the International Monetary Fund (IMF) logo at its headquarters in Washington, D.C., U.S., November 24, 2024. / REUTERS/Benoit Tessier/File Photo

The IMF expects the next funding review for Pakistan in the second half of 2025 and said it would continue discussions with Pakistan authorities towards agreeing over terms of the budget for the 2026 financial year, it said in a statement on May 23.

The IMF's priority remains anchoring inflation within the central bank's medium-term target range of 5–7 percent, the statement said, adding that the Pakistani authorities reaffirmed their commitment to fiscal consolidation while aiming for a primary surplus of 1.6 percent of GDP in FY2026.

An IMF mission, led by Nathan Porter, just concluded its staff visit to Islamabad which began on May 19.

In a statement, Porter said: "We held constructive discussions with the authorities on their FY2026 budget proposals and broader economic policy, and reform agenda supported by the 2024 Extended Fund Facility (EFF) and the 2025 Resilience and Sustainability Facility (RSF). The authorities reaffirmed their commitment to fiscal consolidation while safeguarding social and priority expenditures, aiming for a primary surplus of 1.6 percent 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."

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.

Also read: IMF Approves $1 Billion Bailout to Pakistan Despite Indian Opposition

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