IMF, Govt Resume Budget Talks Ahead of June 10

The Government of Pakistan and the IMF have restarted crucial discussions ahead of the federal budget presentation on June 10, 2025. These talks are focused on securing a long-term economic stabilization deal to help steady Pakistan’s struggling economy and tackle ongoing fiscal challenges

• IMF and Government resume virtual talks to finalize FY2025–26 budget

• Pakistan aims for primary budget surplus of 1.6% of GDP

• Budget to be presented in the National Assembly on June 10

• Economic Survey FY2025 to be released on June 9

• Focus on increasing tax revenues and reducing expenditures

• Pakistan is eyeing a new multi-billion-dollar bailout package post-budget

Pakistan's economy is currently grappling with:

• High inflation,

• Mounting external debt,

• A depreciating currency,

• Limited foreign exchange reserves.

To manage this crisis, Islamabad is hoping to strike a fresh agreement with the IMF. The resumption of these talks is a crucial step toward unlocking future funding and ensuring macroeconomic stability.

The IMF has set out stringent benchmarks that Pakistan must meet before any new loan program can be approved. These include:

• Achieving a primary budget surplus of 1.6% of GDP,

• Raising tax revenues through policy reforms,

• Cutting subsidies, particularly on energy,

• Improving governance and transparency.

The current talks aim to finalize budgetary commitments aligned with these conditions.

“We are in advanced stages of discussions with the IMF team. The budget will reflect our commitment to economic reform and fiscal discipline,”

“We’re aiming to present a people-friendly yet reform-oriented budget. No new taxes will be imposed on essentials,”

To satisfy the IMF and stabilize the economy, the government plans to:

• Increase tax-to-GDP ratio through digital reforms and enforcement,

• Implement structural changes in revenue collection,

• Reduce fiscal deficit by slashing unnecessary spending,

• Expand the tax net, especially targeting undocumented sectors.

• Pakistan could secure a new long-term Extended Fund Facility (EFF) worth over $6 billion.

• It will improve the country’s credit ratings and encourage foreign investment.

• The rupee could stabilize, helping control inflation.

• It would help unlock funding from other sources like the World Bank and the Asian Development Bank.

Pakistan is not the only country turning to the IMF in tough times. Nations like Egypt, Sri Lanka, and Argentina have also recently engaged with the IMF to manage economic crises. The difference lies in how reforms are implemented and how inclusive the policy-making process is.

With the IMF talks back on track and the budget deadline approaching, the coming weeks are critical for Pakistan's economic future. The government is under immense pressure to:

• Deliver a balanced, growth-oriented, and people-centric budget,

• Meet the IMF’s fiscal targets,

• And ensure long-term macroeconomic stability.

If successful, this could mark a turning point in Pakistan’s economic recovery journey.