What happened
An International Monetary Fund mission led by Ms Iva Petrova concluded a staff visit to Islamabad that ran from 13 to 20 May 2026, the Fund said, holding talks on recent economic developments, reform implementation and the budget strategy for fiscal year 2027.
What the mission said
In a statement issued at the end of the visit, Petrova said the discussions with the authorities were “constructive” and covered the impact of ongoing disruptions from the conflict in the Middle East, the FY2027 budget formulation and progress on the reform agenda under the Extended Fund Facility (EFF) and the Resilience and Sustainability Facility (RSF).
She said the authorities reaffirmed their commitment to a primary surplus target of 2 percent of GDP in FY2027, which she said would support fiscal sustainability and continue to build resilience. The envisaged gradual fiscal consolidation would be supported by efforts to broaden the tax base, improve tax administration, and enhance spending efficiency and public financial management at both federal and provincial levels. Discussions on the FY2027 budget were to continue in the coming days.
The State Bank of Pakistan reiterated its commitment to maintaining an “appropriately tight” monetary policy stance to anchor inflation expectations and said it would continue to monitor potential second-round effects from energy price increases. The mission said exchange rate flexibility should continue to serve as a key shock absorber and that efforts should continue to build a deeper foreign exchange interbank market.
Reform agenda
The mission said discussions also covered structural reforms, including in the energy sector and state-owned enterprises, product market liberalization, and financial sector reforms aimed at supporting durable growth and attracting high-quality private investment.
It said progress under the RSF was 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 thanked the federal and provincial authorities for their engagement.
Next steps
The Fund said the next mission, which is envisioned to include the Article IV consultation and the EFF and RSF reviews, was expected to take place in the second half of 2026.
Sources & reporting notes
This is a summary of published reporting, not independent reporting. Quotations are as carried by the cited source. Sources reviewed on 2026-05-20.
- IMF — "IMF Staff Concludes Visit to Pakistan"20 May 2026 · The mission statement by Iva Petrova covering the FY2027 budget, the 2 percent primary surplus target, the EFF and RSF, monetary policy and the next mission.
