Budget 2025-26 postponed to June 10 amid IMF negotiations

Due to ongoing difficulties finalising fiscal targets with the International Monetary Fund (IMF), the federal government has postponed the presentation of the Federal Budget 2025-26 to June 10, pushing back the earlier scheduled date of June 2, officials said.

The News reported on May 9 that the federal government is set to present the budget for the next fiscal on June 2, with Rs921 billion allocated for development projects, far short of the Rs1,600 billion minimum deemed necessary by the Ministry of Planning.

The Economic Survey FY2025, a report card of the performance of various sectors of the economy for the outgoing fiscal year, will be unveiled a day before the budget, on June 9, the finance ministry said.

Talks with the IMF over next year’s budget goals remain unresolved, with sources saying Thursday was the last scheduled day of discussions.

After a morning round, talks between the government and the IMF resumed in the afternoon, but officials confirmed that no breakthrough was reached in either session.

The finance secretary led Pakistan’s delegation during the negotiations, accompanied by senior officials, including the chairman of the Federal Board of Revenue (FBR) and his team.

Sources said the government presented several proposals aimed at easing the tax burden on salaried individuals and reducing the cost of doing business by cutting tax rates on the industrial sector.

A range of suggestions to lower both development and non-development expenditures was also put forward, while the IMF was briefed on plans to boost tax and non-tax revenues.

These included a framework for collecting agricultural income tax and strategies to enhance provincial revenues.

Discussions will continue into next week, according to finance ministry officials, who added that Pakistan is obligated to consult the IMF while setting its budget targets under the terms of the ongoing loan programme.

“Eventually, the government will have to accommodate IMF’s input while finalising fiscal goals,” one source noted.

The negotiations are expected to continue into next week.

The IMF executive board approved on May 9 a fresh $1.4 billion loan to Pakistan under its climate resilience fund and approved the first review of its $7 billion programme, freeing about $1 billion in cash.

"Pakistan’s policy efforts under the (program) have already delivered significant progress in stabilizing the economy and rebuilding confidence, amidst a challenging global environment," the IMF said in a statement.

The review approval brings disbursements to $2 billion within the 37-month programme.