Pakistan has reached an agreement with the International Monetary Fund International Monetary Fund to maintain a tight fiscal framework under ongoing policy discussions, committing to a major fiscal consolidation plan for the upcoming budget cycle.
Under the agreement, Pakistan will aim for a primary budget surplus of Rs2.8 trillion in FY2026–27. The country has also committed to increasing net foreign exchange reserves by $5.6 billion, as part of efforts to stabilize external accounts and reduce pressure from negative reserves.
To support vulnerable households amid inflationary pressures, the government plans to raise allocations for the Benazir Income Support Programme (BISP) by 22%, bringing total funding to Rs845 billion in FY2026–27.
The agreement also places fiscal responsibility on provincial governments, requiring them to collectively generate a cash surplus of Rs1.65 trillion, reinforcing overall budget discipline across all tiers of government.
According to officials, the deal was reached during the third review discussions with IMF staff, and the IMF Executive Board is expected to consider and likely approve the agreement in early May.
Pakistan has additionally requested revisions to reserve targets, including adjusting the end-June 2026 net international reserves target to negative $4.1 billion. For FY2027, the country has committed to achieving equilibrium between central bank reserves and foreign exchange liabilities.
Authorities stated that achieving the revised targets will require an estimated $5.6 billion improvement in reserves, signaling continued reliance on external inflows and reforms to stabilize the economy.
