KARACHI: Pakistan on Thursday sought the World Bank’s technical assistance to fast track the implementation of the Country Partnership Framework (CPF) discussed between the two sides earlier this year, according to an official statement circulated by the finance ministry.

The World Bank’s Board of Executive Directors endorsed the framework in January, aiming to support Pakistan’s long-term development by building human capital, promoting private sector-led growth and enhancing climate resilience through up to $20 billion in pledged lending over the next decade.

A World Bank delegation led by Managing Director for Operations Anna Bjerde met with Finance Minister Muhammad Aurangzeb in Islamabad during the day to review the Bank’s financing portfolio and strengthen bilateral cooperation.

“We are focused on ensuring that climate resilience and sustainable development remain at the heart of our economic planning,” Aurangzeb said, according to the statement. “The CPF represents an important opportunity, and we aim to implement it with full coordination across key ministries and stakeholders.”

The finance ministry said Aurangzeb requested the visiting delegation “to provide technical leadership and assistance to streamline processes and ensure a prioritized and focused rollout of the CPF.”

Bjerde praised Pakistan for continuing with difficult economic reforms under challenging circumstances and for aligning its growth with environmental sustainability.

She also reiterated the Bank’s support for initiatives in areas such as taxation, energy and social protection, while emphasizing girls’ education and women’s empowerment as critical to human capital and economic resilience.

Later in the day, the delegation also met Prime Minister Shehbaz Sharif.

According to a separate statement circulated by Sharif’s office, the prime minister welcomed the delegation and thanked the World Bank for playing a key role in the country’s development.

“We are grateful to the World Bank for the Country Partnership Framework, under which development investments exceeding $20 billion will be made in Pakistan,” he said.

Bjerde, in turn, commended Pakistan’s macroeconomic performance and recent stabilization efforts, describing the CPF as a “model” for other countries.

The meeting was also attended by federal ministers, advisers, parliamentarians and senior government officials along with World Bank Country Director Najy Benhassine.

KARACHI: Pakistan will continue fiscal consolidation, focus on IMF guidelines and bring untaxed and low tax areas into the tax net as it announces its federal budget for fiscal year 2025-26 next month, a top Pakistani brokerage house said in a budget review

Islamabad is currently holding budget talks with the IMF, which earlier this month approved a loan program review for Pakistan, unlocking a $1 billion payment which the State Bank of Pakistan said had been received. A fresh $1.4 billion loan was also approved under the IMF’s climate resilience fund.

“We expect this budget to continue fiscal consolidation, focus on IMF guidelines and bring untaxed/low tax areas in tax net,” Topline Securities said in a budget review.

The brokerage house said the government had committed with the IMF to continue with fiscal consolidation in the FY26 budget to ensure debt sustainability.

“The government targets primary surplus of 1.6% of GDP (vs. 2.0-2.1% of GDP in FY25), a surplus for the third consecutive year after two decades. The government has also committed to use any windfall dividend expected from the central bank over and above 1% of GDP to retire debt,” the review said.

The analysis predicted the Federal Board of Revenue’s FY26 tax revenue growth target could be the lowest in six years.

“FBR revenue target is expected at Rs14.1-14.3 trillion, up 16-18% YoY, which will be the lowest percent growth in the last 6 years,” it said.

The FBR has achieved a five-year revenue Compound Annual Growth Rate of 25% from FY21-25.

“We believe, out of this required 16-18% growth, approximately 12% would be achieved through autonomous growth driven by real GDP growth of 3.6% and inflation of 7.7%. The remaining 4-5% growth translates into additional tax measures of Rs500-600 billion,” the analysis estimated.

Revenue measures expected include a change in the GST calculation price of sugar, the likely introduction of taxes on pension, retailers and wholesalers and a likely increase in federal excise duty on cigarettes, fertilizer products and pesticides by 500bps. A tax on the income of freelancers, vloggers and YouTubers is also expected.

“Government is expected to announce some relief measures namely (1) extension in exemption limit on salary or reduction of tax rate by 2.5% for all salary brackets, (2) rationalization of duties on trade, (3) likely housing finance subsidy, (4) inflation adjustment in minimum salary and unconditional cash transfer, and (5) some rationalization in super tax,” the analysis said.

It said the government would reportedly set a GDP growth target of 3.5-4.5% “while we expect GDP growth target for FY26 at 3.5-4.0% led by services.”

The analysis predicted the budget was likely to be neutral for the stock market in the short-term, neutral to positive for cement, steel, oil and gas, consumers, and independent power producers, and neutral for oil marketing firms, IT, banks, pharma, autos and textile.

Pakistan’s 37-month $7 billion IMF loan program, approved on Sept. 25, 2024, aims to build resilience and enable sustainable growth. Key priorities include entrenching macroeconomic sustainability through implementation of sound macro policies, including rebuilding international reserve buffers and broadening of the tax base; advancing reforms to strengthen competition and raise productivity and competitiveness; reforming state-owned enterprises and improving public service provision and energy sector viability; and building climate resilience.

Highlighting progress in Pakistani policies to stabilize the economy, the IMF said earlier this month when it approved the latest tranche that Pakistan’s fiscal performance had been strong, with a primary surplus of 2.0% of GDP achieved in the first half of FY25, keeping Pakistan on track to meet the end-FY25 target of 2.1% of GDP.

“Inflation fell to a historic low of 0.3% in April, and progress on disinflation and steadier domestic and external conditions, have allowed the State Bank of Pakistan to cut the policy rate by a total of 1100 bps since June 2025,” the IMF added.

“Gross reserves stood at $10.3 billion at end-April, up from $9.4 billion in August 2024, and are projected to reach $13.9 billion by end-June 2025 and continue to be rebuilt over the medium term.”