The International Monetary Fund (IMF) delegation arrived in Islamabad on Monday and officially launched policy-level discussions with the government’s economic teams to finalise budget proposals for the fiscal year 2025-26.
According to 24NewsHDTV, the talks, which began today, will continue until May 22. Officials from the Finance Ministry, Federal Board of Revenue (FBR), Planning Commission, Economic Affairs Division, and Petroleum Ministry are participating in the negotiations.
As per the channel report, talks with State Bank of Pakistan (SBP) officials are also scheduled.
Sources within the Finance Ministry confirmed that the core agenda includes potential tax relief for the salaried class, in line with Prime Minister Shehbaz Sharif’s directive to make annual salaries up to Rs 1.2 million tax-free.
Discussions will focus on reducing income tax rates for salaried employees, a move intended to alleviate inflationary pressure on the middle class.
The IMF, however, is expected to push for alternative revenue measures to compensate for any relief granted.
The global lender has expressed concern over Pakistan’s external financial vulnerabilities, despite recent improvements in debt repayment capacity.
According to the IMF’s latest projections, Pakistan faces a massive external financing need of $19.3 billion in the coming fiscal year alone.
The requirement is projected to rise to $19.75 billion in 2026-27 and to $31.35 billion by 2027-28, the highest during the five-year outlook.
In the years that follow, the country will still require $23.13 billion in 2028-29 and $22.16 billion by 2030.
The IMF team is also expected to advise against expanding subsidies, warning that doing so could jeopardise the country’s fragile economic stability and undermine previous reform efforts.
Reporter: Waqas Azeem