Overview
- A staff IMF mission that visited Islamabad from May 13–20 concluded this week and said Pakistan committed to a primary surplus target equal to 2% of GDP for FY2027, meaning the government will aim to run a budget surplus before interest payments.
- The State Bank of Pakistan reaffirmed an 'appropriately tight' monetary stance to contain inflation and the IMF earlier this month cleared about $1.32 billion in fresh financing under the broader $7 billion programme that underpins investor confidence.
- Negotiations continue on revenue measures after the mission, with the IMF pressing for stronger tax mobilisation including a higher petroleum levy, an end to new SEZ/tech-zone tax exemptions, and additional provincial revenue contributions of roughly Rs430 billion and a combined provincial cash surplus near Rs2 trillion.
- A provisional deal to raise Benazir Income Support Programme quarterly payments from Rs14,500 to Rs18,000 was reported, but officials still disagree on revenue estimates, the cost of proposed tax relief for salaried taxpayers, and how to plug Federal Board of Revenue shortfalls.
- Talks are expected to continue in the coming days with a follow-up IMF mission and formal Article IV, EFF and RSF reviews planned for the second half of 2026, and the government aims to finalise the FY2027 budget ahead of an early June presentation.