Pakistan, IMF near consensus on revised economic, fiscal framework

2026-03-11 - 07:34

ISLAMABAD – Pakistan and the International Monetary Fund are close to reach a consensus on a revised economic and fiscal framework for the ongoing fiscal year, as virtual negotiations between the two sides continued on Wednesday. The discussions are aimed at finalising a staff-level agreement under the $7 billion Extended Fund Facility (EFF) programme currently in place between Pakistan and the IMF. The officials familiar with the talks said that the revised framework proposed lowering the tax collection target of the Federal Board of Revenue (FBR) to Rs13.45 trillion by June 2026. The adjustment comes after a review of the country’s fiscal performance and revenue outlook for the current financial year. The officials said the revision was being considered in light of slower-than-expected tax collection during the first eight months of the fiscal year. Sources said that the FBR may find it difficult to achieve the previously agreed tax-to-GDP ratio target of 11 percent for fiscal year 2025–26, which had been set during earlier negotiations with the IMF. Data available for the first eight months of the ongoing fiscal year shows that tax collection remained Rs428 billion below the revised target, reflecting the challenges faced by the revenue authority in meeting its goals. The officials added that both sides are continuing virtual consultations to finalise the updated macroeconomic framework, which will outline fiscal targets and policy commitments under the IMF-supported programme. Once finalised, the agreement will pave the way for the next stage of the programme’s implementation.