Published June 1, 2026 Updated about an hour ago By Anjum Ibrahim The International Monetary Fund (IMF) reportedly approved the Pakistan budget for next fiscal year during a week-long staff visit (13 May to 20 May), and in a press release explicitly acknowledged that the mission’s focus was on “recent developments, reform implementation and the budget strategy for fiscal year 2027” – external developments, including those related to the Middle East conflict, accounting for severe global supply shortages of oil, LNG, fertilizer, helium and other key minerals, were bizarrely deemed “contained” for Pakistan. The budget, expected to be announced this Friday, will, therefore, have few surprises for two reasons: (i) the third review of the Extended Fund Facility (EFF) and the second review of the Resilience and Sustainability Facility (RSF) documents were uploaded on the Fund website on 15 May – two days after the arrival of the mission to review the budget – detailing time-bound conditions and structural benchmarks agreed with the authorities till the next mandatory quarterly review scheduled for 15 September. The envisaged disbursement subject to reaching a staff level agreement is 760 million SDRs under the EFF and 76.9 million SDRs under the RSF; and (ii) budget formulators typically disclaim responsibility for almost 75 to 80 percent of the budgeted allocations on the grounds that they are taken by the elite/influentials and, when the country is on a Fund programme, by the IMF. The annual raise in total budgeted outlay is premised on a very optimistic projection of the Gross Domestic Product (GDP) growth rate. Post-Covid 19, with the exception of 2021-22, the growth rate has been well below projections and, given that the country has been on a rigid upfront IMF programme since 2019, this has implied slashing the Public Sector Development Programme (PSDP) to meet the deficit targets agreed with the Fund. Sadly, this has been the practice during nearly all the Fund programmes, Pakistan is currently on the twenty-fourth programme, yet, over time as was to be expected, the PSDP actual disbursement has been shrinking in terms of the percentage…