IMF Asks Pakistan To Reduce Inflation, Increase Tax Revenue

IMF Mission Head Nathan Porter says budget should include a clear strategy to increase tax revenue, review spending priorities and safeguard social sector.  

ISLAMABAD: (UrduPoint/UrduPoint / Pakistan Point News-May 24^th, 2025) The International Monetary Fund (IMF) on Saturday emphasized the need to reduce inflation, increase tax revenue and continue reforms in Pakistan.

Led by Nathan Porter, the International Monetary Fund (IMF) mission completed its visit, which began on May 19.

During the visit, detailed and constructive discussions took place regarding the fiscal year 2025-26 budget, economic reforms, and policy matters.

In a statement issued at the end of the mission, it was announced that budget negotiations would continue in the coming days, with the next review meeting scheduled for the second half of this year.

The talks with Pakistani officials were positive and constructive. The delegation acknowledged Pakistan’s commitment to financial stability and policy continuity. Detailed discussions were held on ongoing energy sector reforms, eliminating costly electricity structures and reducing energy costs.

The IMF urged Pakistan to maintain a tight monetary policy to bring inflation within the target range of 5 to 7 percent. The State Bank was instructed to formulate monetary policy with inflation in mind.

The IMF also stressed the importance of fundamental reforms, fiscal discipline and broadening the tax base to boost economic growth.

The delegation stated that Pakistan’s Primary surplus target has been set at 1.6 percent.

Additionally, maintaining foreign exchange reserves and ensuring the Currency exchange rate remains market-driven will be necessary to counter external economic pressures in the upcoming fiscal year.

Nathan Porter, head of the IMF mission, said that the upcoming budget should include a clear strategy to increase tax revenue, review spending priorities, and safeguard the social sector.

The budget strategy should also incorporate reforms that promote sustainable development, financial stability and improved business opportunities.

The IMF expressed gratitude for the cooperation of Federal and provincial governments during the visit and praised the efforts of Pakistan’s government. The statement added that discussions with Pakistan would continue positively and that the IMF will fully support advancing the reform agenda in the future.