ISLAMABAD: The International Monetary Fund (IMF) has assessed a potential revenue shortfall of over Rs400 billion for Pakistan in the current fiscal year, contingent on corresponding reductions in government expenditure, according to sources cited by The News on Tuesday.
Policy-level discussions between Pakistani authorities and the visiting IMF review mission are ongoing and are expected to continue through Wednesday. The Ministry of Finance informed the Fund that government expenditures are relatively rigid and difficult to adjust in proportion to the projected revenue gap.
The Federal Board of Revenue (FBR) has indicated it will aim to achieve the tax collection target of Rs14.13 trillion despite a shortfall in the first-quarter collections. IMF officials noted continuing external vulnerabilities and cautioned that regional tensions or rises in global commodity prices could further impact macroeconomic stability.
In the talks, Pakistan requested a downward revision of GDP growth for FY2025-26 from the official estimate of 4.2% to approximately 3.5%. Consumer price index (CPI)-based inflation for the year is projected between 7% and 8%. Discussions also included adjustments to provincial primary budget surplus targets in light of reconstruction needs after the recent floods.
Post-flood damage assessments, initially estimated at Rs371 billion, have been revised to over Rs650 billion. Pakistan has requested updated evaluations from the World Bank, Asian Development Bank, European Union, and UNDP.
The IMF and Pakistan are preparing a draft of the Memorandum of Economic and Financial Policies (MEFP) and may agree on new structural benchmarks ahead of the next programme review. Key points under discussion include fiscal and macroeconomic assumptions, the Reko Diq mining project, and new tariff and automotive policy frameworks.
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