IMF Budget Talks End Today, Relief for Salaried Class Tied to Govt Expenditure Cuts

The International Monetary Fund (IMF) team is set to conclude its current round of discussions on the 2025-26 federal budget today. However, virtual negotiations are expected to continue post-budget speech, top sources told ProPakistani.

All IMF conditions will be met before the Finance Bill 2025 becomes law. A key sticking point remains the IMF’s insistence that any relief to the salaried class must be offset by cuts in government expenditures.

Also, the Ministry of Finance has indicated there will be no increase in salaries or pensions in the upcoming budget.

The IMF has also expressed reservations over offering significant relief to the export sector and has linked the upcoming tax collection target to a parallel reduction in state spending. Sources said the government has requested a delay in raising duty on fertilizer from 5 percent to 10 percent and imposing a new 5 percent tax on pesticides.

Meanwhile, despite overall budgetary restraint, defense spending is expected to rise as the past few weeks have shown how much it is needed.

The IMF has called on provincial governments to rein in their expenditures and boost revenue generation.