IMF team due on May 14 to review Pakistan’s federal budget

An International Monetary Fund (IMF) team will arrive for an eight-day visit from May 14 to May 22 to review Pakistan’s budgetary measures, Nukta has learned.

The IMF delegation will meet with the Ministry of Finance, with discussions expected to focus on key measures the government plans to take in the 2025-26 fiscal year.

The government will be asked to set a tax collection target of PKR 14.2 trillion ($50 billion) for 2025-26, with a tax-to-GDP ratio of 11%.

The Federal Board of Revenue (FBR) has already shared tax collection data with the IMF. For the current fiscal year, the tax-to-GDP ratio is estimated at 10.6%.

The tax collection target for May has been set at PKR 950 billion. For the entire fiscal year, collections may reach around PKR 11.8 trillion.

The FBR’s original tax target for 2024-25 was PKR 12.97 trillion, but due to revenue shortfalls and a slower-than-expected economy, the IMF reduced it to PKR 12.33 trillion. If collections reach PKR 11.8 trillion, the shortfall could be PKR 530 billion.

To make up the gap, the government is eyeing pending court cases worth PKR 500 billion. However, if recoveries are delayed, the shortfall could exceed PKR 500 billion, sources said.

Last September, the IMF board approved a $7 billion Extended Fund Facility (EFF) for Pakistan, with the country receiving a first tranche of $1.03 billion.

The IMF staff and Pakistani authorities have since reached a staff-level agreement on the first review under the EFF and a new Resilience and Sustainability Facility (RSF) arrangement.

The IMF praised Pakistan’s progress, citing continued fiscal consolidation, tight monetary policy to curb inflation, energy sector reforms, and efforts to boost growth while strengthening social spending.

Earlier, Pakistan’s finance minister said the economy had stabilized and must now focus on export-led growth.