Pakistan has initiated early virtual consultations with the International Monetary Fund (IMF) to set key fiscal targets for the upcoming federal budget 2026–27, according to media reports
Officials said the IMF has proposed that the government discontinue subsidies on petroleum products and ensure timely adjustments in energy prices to reduce fiscal pressure.
During the discussions, the IMF reportedly stressed the need for prompt implementation of recommendations from regulatory authorities regarding electricity and energy tariffs. It also advised reducing tax exemptions, concessions, and special relief measures in the next budget.
The Fund further called for broadening the tax base and improving revenue collection, suggesting an annual increase of at least one percent in the tax-to-GDP ratio. Measures to reduce overall public expenditure and ensure fiscal discipline were also discussed.
Sources said debt management was another key area of focus, with emphasis on adopting policies to gradually reduce the country’s debt burden.
The consultations are part of ongoing engagements between Pakistan and the IMF ahead of budget finalisation, as authorities seek to balance fiscal consolidation with economic growth priorities.