Major Headway in Virtual Talks as IMF Agrees to Rs 200 Billion Increase in Pakistan's PSDP

ISLAMABAD: Pakistan and the International Monetary Fund (IMF) have made significant headway during virtual negotiations, ARY News reported, citing reliable sources.

According to sources, the IMF has agreed to a proposal to increase the federal government’s development budget from Rs 1,126 billion to Rs 1,326 billion.

Consequently, the government has decided to expand the overall volume of the Public Sector Development Programme (PSDP) for the upcoming fiscal year by adding Rs 200 billion in development funding.

Sources further revealed that the government managed to create the necessary fiscal space to accommodate this Rs 200 billion increase.

Under the revised PSDP layout, allocations for the Sindh province as well as Sustainable Development Goals (SDGs) initiatives have also been raised.

Meanwhile, crucial talks have taken place between the Pakistan People’s Party (PPP) and the ruling government regarding the upcoming budget. Sources indicate that the PPP’s key demands will be addressed and fulfilled before the formal budget presentation.

Contacts between the government and the Pakistan Peoples Party (PPP) continued as both sides discussed budget 2026-27-related matters.

According to sources, a PPP delegation comprising senior leaders Naveed Qamar and Sherry Rehman met Minister for Planning Ahsan Iqbal. During the meeting, discussions focused primarily on the development budget and related policy matters.

According to sources, Ahsan Iqbal briefed the PPP leadership on possible new projects under the Public Sector Development Programme (PSDP). The PPP delegation also raised its concerns regarding the allocation and utilization of PSDP funds.

The Planning Minister assured the PPP that their concerns would be addressed. Both sides are expected to hold another round of consultations later in the evening.

Earlier, the government had decided against presenting the federal budget 2026-27 on June 05, sources said.

The next fiscal year’s budget is likely to be rescheduled to June 10 or 12.

The government, however, doesn’t make the final decision with regard to the new date of announcement of the next year’s budget.

Also Read: Pakistan plans capital gains tax on cryptocurrency transactions in Budget 2026-27

Meanwhile, the National Economic Council’s (NEC) session, which was scheduled on June 03 (Wednesday), has also been postponed.

“The change in budget 2026-27 schedule, has been made owing to the regional election in Gilgit-Baltistan”, according to sources. Moreover, further talks are likely with the IMF over the development budget and other budget-related issues, sources added.