An International Monetary Fund mission visiting Pakistan has concluded talks with the authorities after discussions centered on recent economic developments, fiscal planning for the next financial year, and progress on reforms under the country’s IMF-backed programs, according to a statement issued by the lender early Thursday. Pakistan reaffirmed its commitment to a primary budget surplus target of 2% of gross domestic product for fiscal year 2027 during talks with an International Monetary Fund mission that concluded in Islamabad on May 20, as discussions continued on the country’s next budget and reform agenda.

Pakistan reaffirmed its commitment to a primary budget surplus target of 2% of gross domestic product for fiscal year 2027 during talks with an International Monetary Fund mission that concluded in Islamabad on May 20, as discussions continued on the country’s next budget and reform agenda.

In a statement issued at the end of the visit, Petrova said discussions with Pakistani authorities covered the impact of disruptions linked to the conflict in the Middle East, fiscal policy plans for FY2027, and progress on structural reforms.

The fund said the government’s planned fiscal consolidation would be supported by efforts to widen the tax base, improve tax administration, raise spending efficiency, and strengthen public financial management at both federal and provincial levels. Talks on the FY2027 budget are set to continue in the coming days.

The State Bank of Pakistan also reiterated its commitment to keeping monetary policy sufficiently tight to anchor inflation expectations, while closely monitoring possible second-round effects from higher energy prices, according to the IMF statement.

The fund said exchange rate flexibility should remain a key buffer against external shocks and called for continued efforts to deepen the foreign exchange interbank market.

The discussions also covered structural reforms in the energy sector, state-owned enterprises, product market liberalization, and the financial sector, to support durable growth and attract higher-quality private investment.

Progress under the Resilience and Sustainability Facility was also reviewed, including work on a disaster risk financing framework, integration of climate considerations into budget and investment planning, and reforms related to power subsidies.

The IMF said its next mission to Pakistan, expected in the second half of 2026, is likely to include the Article IV consultation as well as reviews under the EFF and RSF programs.

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