The budget talks between Pakistan and the International Monetary Fund (IMF) for fiscal year 2025–26 remained inconclusive on Saturday, primarily due to disagreements over proposed relief measures by Prime Minister Shehbaz Sharif.
The IMF reportedly raised objections to several government proposals, particularly additional power subsidies for domestic consumers.
It also dismissed the government’s plan to reduce electricity tariffs for industrial users, demanding the timely tariff hikes during the next fiscal year.
IMF emphasized the need to implement a comprehensive plan to eliminate circular debt in FY2026. This includes negotiations with Independent Power Producers (IPPs) to reduce the debt by Rs348 billion.
Additionally, commercial loans of Rs1,252 billion will be secured from the commercial banks to clear outstanding circular debt, with the IMF demanding that net circular debt in the power sector be reduced to zero inflow in FY2026.
