Islamabad, Mar 17 2025: The federal government is preparing to unveil the budget 2026 before June fiscal year, marking a significant departure from the usual June timeline.
This early presentation is closely linked to ongoing negotiations with the International Monetary Fund (IMF) as Pakistan works toward finalizing the first review of its $7 billion Extended Fund Facility (EFF) program.
Sources indicate that key institutions, including the Ministry of Finance and the Federal Board of Revenue FBR), have already begun drafting fiscal policies and revenue targets.
The move is aimed at ensuring that IMF-recommended measures are incorporated into the budget 2026 before June early, potentially expediting the approval process for the next tranche of IMF funding.
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According to Shankar Talreja, a senior analyst at Topline Securities, the budget’s early presentation could be strategic in securing IMF board approval before June ends.
He noted, “It may take a few weeks to finalize the Staff Level Agreement, as the government might share FY26 budgetary plans with the IMF or pass the budget in parliament beforehand to meet IMF conditions.”
Even if a Staff Level Agreement is reached soon, Talreja pointed out that the IMF board may impose preconditions, such as ensuring that Pakistan’s budget aligns with IMF guidelines.
Historically, delays between staff-level agreements and board approvals have hindered disbursements due to unmet prior conditions. The government’s decision to present the budget early aims to avoid such setbacks and secure timely financial assistance.
The upcoming fiscal plan is expected to introduce stringent revenue measures and expenditure restrictions to address Pakistan’s ongoing economic difficulties.
Finance Minister Muhammad Aurangzeb has already signaled a focus on fiscal discipline, indicating that government employees may not receive salary or pension increases in the next financial year.
This decision underscores Pakistan’s commitment to fulfilling IMF conditions while attempting to stabilize its economy.
The early budget strategy is a calculated move to ensure financial continuity and prevent disruptions in securing crucial external funding.
