Pakistan’s upcoming budget is taking shape under intense negotiations with the International Monetary Fund (IMF), with early signals pointing toward tougher fiscal conditions and potential inflationary pressure on consumers.
During ongoing technical-level talks, the Ministry of Finance has begun sharing key economic data with the IMF mission as both sides work to finalize the new budget framework. Officials are reportedly considering over Rs. 400 billion in fresh tax measures as part of efforts to meet revenue targets.
Deputy Prime Minister Ishaq Dar has been given a central role in overseeing the budget process, heading a committee tasked with finalizing tax proposals and policy recommendations.
According to sources, the IMF has raised strong concerns over a projected Rs. 683 billion tax shortfall and has pushed for faster and more effective tax collection on agricultural income across all provinces. The lender has also suggested revising Pakistan’s annual economic and revenue targets in light of weaker-than-expected performance.
Officials briefed the IMF that achieving the 4.2% GDP growth target may not be possible, while even the revised tax target of Rs. 13,989 billion for the current fiscal year appears difficult to meet.
The IMF has further urged the government to pass on global oil price pressures to consumers and ensure strict fiscal discipline. It noted that Pakistan has already collected over Rs. 1,330 billion in petroleum levy, close to its annual target of Rs. 1,468 billion.
In addition, the IMF emphasized increasing public spending efficiency, calling for at least 3% of GDP allocation to health and education, and pressing for timely implementation of the National Fiscal Pact without delays or exemptions.
