The International Monetary Fund (IMF) mission on Wednesday wrapped up its discussions with the officials in the finance ministry, focusing on economic developments, fiscal plans for the next fiscal year (FY2027-28), and progress on reforms under the fund-supported programmes, it said in a statement.
The IMF said authorities in Islamabad have committed to a primary surplus target of 2% of gross domestic product in fiscal year (FY) 2027-28.
The fund’s team, led by advisor Iva Petrova, visited Islamabad from May 13-20 for discussions that focused on economic developments, progress on reforms and the impact of disruptions linked to the conflict in the Middle East.
The IMF earlier in May cleared the South Asian nation to access about $1.32 billion in fresh funding. The country is on a $7 billion IMF programme.
The State Bank of Pakistan (SBP) has committed to maintaining an “appropriately tight monetary policy stance” to anchor inflation expectations and will continue to closely monitor potential second-round effects from energy price increases, the IMF said.
Furthermore, it added that exchange rate flexibility should continue to serve as a key shock absorber, and efforts should continue to build a deeper foreign exchange interbank market.
“Discussions also covered ongoing structural reforms, including in the energy sector and state-owned enterprises, product market liberalisation, and financial sector reforms aimed at supporting durable growth and attracting high-quality private investment,” the lender said.
The statement added that the progress under the Resilience and Sustainability Facility (RSF) was also discussed, including efforts to adopt a disaster risk financing framework, integrate climate considerations into budget and investment planning, and advance power subsidy reforms.
“The mission thanks the federal and provincial authorities for their constructive engagement, strong collaboration, and continued commitment to sound policies,” the IMF said, concluding the statement.
Discussions on the FY2027 budget will continue in the coming days, according to the statement.
The next mission, which is envisioned to include the Article IV consultation and Extended Fund Facility (EFF) and RSF reviews, is expected to take place in the second half of 2026.
