Islamabad, March 27, 2026 – The International Monetary Fund has shared a draft of the Memorandum of Economic and Financial Policies (MEFP) with Pakistan, marking a crucial step in finalizing the 2026–27 budget and ongoing talks under the third review of the Extended Fund Facility and second review under the Resilience and Sustainability Facility.
Government officials, speaking on condition of anonymity, confirmed that the draft has been circulated among relevant ministries and institutions, including the State Bank of Pakistan and the Federal Board of Revenue, to gather feedback on proposed performance targets, policy actions, and macroeconomic commitments. A staff-level agreement (SLA) is expected in the coming days, followed by the issuance of a Letter of Intent (LoI) to be signed by the Finance Minister and the SBP Governor.
The MEFP draft sets the FBR’s tax collection target at Rs15.08 trillion for 2026–27, while the current fiscal year’s target has been revised downward to Rs13.4 trillion. The IMF has also urged Pakistan to adopt more frequent adjustments of petroleum, oil, and lubricant (POL) prices to better reflect international market fluctuations.
An IMF team, led by Iva Petrova, held discussions both in Karachi and Islamabad, as well as virtually from February 25 to March 11, 2026. Although the talks remained inconclusive, both sides agreed to continue deliberations to reach a consensus. A successful agreement would pave the way for the release of the next IMF tranche amounting to $1.2 billion, pending approval from the IMF Executive Board.
This step is seen as pivotal in supporting Pakistan’s fiscal consolidation, economic stability, and timely implementation of the 2026–27 budget.