IMF-Pakistan talks: Key discussions, outcomes and what comes next

The International Monetary Fund (IMF) on Wednesday concluded its discussions with Pakistani authorities on key economic developments, fiscal planning for the upcoming financial year, and progress on reforms under the country’s IMF-backed programmes.Led by IMF advisor Iva Petrova, the team visited Islamabad from May 13 to May 20.Earlier this month, the IMF cleared the South Asian nation to access about $1.32 billion in fresh ‌funding with Pakistan on a $7 billion IMF program.What was discussed?The talks focused on ongoing structural reforms, including changes in the energy sector, state-owned enterprises, product market liberalisation, and financial sector reforms.The IMF and Pakistani authorities also reviewed the impact of disruptions caused by the ongoing Middle East conflict, preparations for the FY2027 budget, and progress under the Extended Fund Facility (EFF) and the Resilience and Sustainability Facility (RSF).According to the statement, discussions also covered measures aimed at supporting long-term economic growth and attracting high-quality private investment.Progress under the RSF framework was another major focus area, including efforts to introduce a disaster risk financing framework, integrate climate considerations into budget and investment planning, and push ahead with power subsidy reforms.Key outcomes of the talksPakistan reaffirmed its commitment to achieving a primary surplus target of 2 percent of GDP in FY2027, a move aimed at strengthening fiscal sustainability and economic resilience.The State Bank of Pakistan also reiterated its commitment to maintaining a tight monetary policy stance to keep inflation expectations under control.The IMF further noted that exchange rate flexibility should continue to act as a key shock absorber, while efforts to deepen the foreign exchange interbank market should continue.The fund added that discussions on Pakistan’s FY2027 budget will continue in the coming days, while its next mission to the country is expected in the second half of 2026 for consultations and programme reviews.