Islamabad, 23 May 2025: As the International Monetary Fund (IMF) team concludes its ongoing visit to Pakistan, Budget 2025 is being drafted with a clear focus on aligning with the lender’s requirements.
Authorities are expected to present the federal budget to parliament on June 2, and insiders reveal that fulfilling the IMF’s preconditions remains a key priority before the finance bill is tabled.
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Sources have confirmed that the IMF is closely monitoring fiscal discipline measures and has raised objections to proposed concessions for the export sector.
The Fund has also urged both federal and provincial governments to curb their expenditures while enhancing revenue collection. These discussions are likely to continue virtually after the in-person meetings conclude.
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Defense and Fertilizer Tax Adjustments
While most civilian sectors may face spending freezes, Budget 2025 is anticipated to include an increase in defense allocations, reflecting the country’s evolving security requirements.
At the same time, a proposal to raise the Federal Excise Duty (FED) on fertilizer products by 5% to 10% has met with resistance.
Insiders suggest there are calls to delay this move to avoid further pressure on the agriculture sector, though no final decision has been confirmed.
Revenue Goals and Spending Cuts Go Hand-in-Hand
Sources also noted that the Federal Board of Revenue’s tax collection goals are dependent on strict control over government expenses.
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This condition reinforces the broader message: unless significant fiscal tightening is achieved, the government will have limited space to offer economic relief to the public.
As Budget 2025 approaches, all eyes remain on the government’s balancing act between meeting IMF conditions and addressing domestic socio-economic pressures.
