ISLAMABAD: Pakistan and the International Monetary Fund (IMF) have made significant progress in ongoing budget negotiations, with reports suggesting that the IMF has agreed to an increase in Pakistan’s Public Sector Development Programme (PSDP) allocation by Rs200 billion.
According to sources, the federal government is planning to raise the PSDP size from Rs1,126 billion to around Rs1,326 billion for the upcoming fiscal year 2026–27.
Officials say the additional allocation has been approved through fiscal adjustments, while development spending for Sindh and SDG-related projects will also be increased.
The development budget expansion comes after key consultations between government and Pakistan Peoples Party (PPP) leadership on budget priorities and public spending.
Separately, discussions between Deputy Prime Minister Ishaq Dar, Finance Minister Muhammad Aurangzeb, and PPP leadership focused on expenditure planning, development schemes, and macroeconomic stability.
Sources further said that both sides have agreed in principle to present the federal budget 2026–27 on June 10, subject to final approval by the Prime Minister.
The budget is expected to prioritize public welfare, sustainable economic growth, and improved fiscal discipline, while maintaining development momentum across key sectors.
