IMF urges Pakistan to bring inflation within 5-7pc target

Islamabad: In the negotiations between the International Monetary Fund (IMF) and Pakistan, the financial institution has urged Pakistan to bring inflation within the target of 5 to 7 percent.

A statement on the negotiations between Pakistan and the IMF has been issued, which states that the visit of the IMF mission to Pakistan has been completed, and constructive discussions were held with Pakistani officials on the budget for the fiscal year 2025-26.

The statement says that Pakistan's primary surplus target has been set at 1.6 percent, foreign exchange reserves will have to be restored, and the exchange rate will have to be flexible. Pakistani officials are confident about reforms, and further discussions on the budget will continue in the coming days.

It has been stated that discussions were held to reduce the cost of energy in Pakistan, while consultations were also held on basic reforms to increase the rate of economic growth. It has also been emphasized to make economic policy strong and sustainable so that no gaps remain.

The statement added that the monetary policy should be made stricter for economic policy. The State Bank should make a monetary policy keeping inflation in mind, foreign exchange reserves should be kept stable in the next fiscal year, and the exchange rate of the currency should be kept in line with the market so that it can withstand external pressure.

The IMF statement said that it is grateful for the cooperation of the federal and provincial governments in the visit to Pakistan, and appreciates the efforts of the government of Pakistan for holding constructive talks. Pakistan's commitment to stability in economic policy is commendable, and talks with Pakistan will continue in a positive manner in the future.

IMF mission chief Nathan Porter says that tax revenue should be increased in the budget for the next fiscal year. The IMF wants consultations on spending priorities in the next budget.