The International Monetary Fund has called on the Government of Pakistan to refrain from continuing subsidies on petroleum products.
According to sources, preliminary virtual consultations between the Government of Pakistan and the IMF are ongoing in preparation for the 2026–27 budget.
The IMF stated that timely adjustments in energy and fuel prices are essential to avoid fiscal pressure, and that recommendations from regulatory authorities regarding energy and electricity tariffs should be implemented without delay.
The IMF has also demanded that tax exemptions and concessions be kept to a minimum in the upcoming budget.
Sources further indicated that proposals include expanding the tax net, reducing sales tax exemptions, and cutting expenditures further. Additionally, the IMF has suggested increasing the tax-to-GDP ratio by at least one percentage point.
According to sources, key targets for the upcoming budget are being finalised between the Government and the IMF. With improvements in global conditions and economic reforms, the growth target for the next fiscal year is expected to reach around 5.5% in the medium term.
