ISLAMABAD — The federal government has postponed the FY26 budget presentation to June 10, more than a week later than originally planned, due to ongoing IMF negotiations and Prime Minister Shehbaz Sharif’s upcoming foreign trip, according to The Express Tribune.
The delay is linked to the prime minister’s four-nation tour starting May 25 and pending decisions on key expenditure areas. Sources indicate the government is contemplating increasing the petroleum levy beyond the current Rs78 per litre to fund an expanded Public Sector Development Programme (PSDP), which is now proposed to reach Rs1 trillion.
The Annual Plan Coordination Committee meeting, initially set for May 26 to approve macroeconomic targets and PSDP allocations, has been postponed indefinitely.
Federal Board of Revenue Chairman Rashid Langrial confirmed that virtual talks with the IMF will continue, focusing on tax revenue targets and other fiscal matters. Planning Minister Ahsan Iqbal cited the Eid holidays and limited time after IMF discussions as reasons for the budget delay.
High-level consultations with Deputy Prime Minister Ishaq Dar and coalition partners took place Friday to finalize PSDP priorities. Dar emphasized the need to align development spending with the government’s URAAN Pakistan vision, which aims for inclusive and innovation-driven growth.
On fiscal reforms, a committee was convened to implement the National Fiscal Pact, designed to boost federal revenue capacity and address structural deficits.
Meanwhile, The Express Tribune reported that the IMF has withheld approval for the government’s plan to retire Rs1 trillion in circular debt via inflated dividends from state-owned firms, citing concerns over a surge in Pakistan State Oil’s share price. The revised plan excludes PSO and targets retiring Rs170 billion next year, including Rs19 billion for PSO.
The IMF is also resisting demands for power subsidies beyond Rs1.04 trillion, urging adherence to fiscal discipline. In response, the government has reduced other subsidies.
PM Shehbaz’s foreign tour will include visits to Iran, Türkiye, Azerbaijan, and Tajikistan, where he will express gratitude for support during recent tensions with India and attend the Glacier Conference in Dushanbe.