Policy-level negotiations between Pakistan and the International Monetary Fund (IMF) on the budget proposals for the upcoming fiscal year 2025-26 are set to commence tomorrow and will continue until May 23.
These discussions follow the completion of technical-level talks last week and aim to finalize key aspects of the fiscal plan ahead of the budget presentation scheduled for June 2.
Sources said various proposals will be tabled to offer relief to the salaried class, with the IMF emphasizing the need for alternative revenue measures to offset any concessions.
The talks come amid concerns raised by the IMF in its recent report on Pakistan’s external financial needs, which highlighted that although Pakistan’s debt repayment capacity has improved, risks persist.
The report cautioned that escalating tensions with India could undermine economic reforms, while easing of policies and political pressures, including subsidies, may jeopardize the country’s fragile economic stability.
According to the IMF, Pakistan faces an external financing requirement of $19.3 billion in the next fiscal year alone.
The need is expected to rise to $19.75 billion in 2026-27, followed by $31.35 billion in 2027-28 — the largest demand over the five-year outlook. Further external financing requirements include $23.13 billion in 2028-29 and $22.16 billion by 2030.
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