The International Monetary Fund (IMF) delegation has arrived in Pakistan to commence final negotiations on the federal budget for the fiscal year 2026.

According to sources within the Ministry of Finance, the talks, which began this week, will continue until May 22, involving key government institutions including the Ministry of Finance, Federal Board of Revenue (FBR), Planning Commission, State Bank of Pakistan, Economic Affairs Division, and the Ministry of Petroleum.

Officials said the primary focus of these discussions is to finalise revenue and expenditure proposals, ensuring alignment with IMF conditions as Pakistan seeks to stabilise its economy amid ongoing fiscal challenges.

Pakistan to receive $410mln in climate financing

In a parallel development, the IMF has underscored the pressing need for Pakistan to address climate change risks, highlighting that the country ranks among the top 15 most vulnerable nations worldwide to climate-related shocks.

As part of the fiscal 2026 budget talks, Pakistan is expected to receive $410 million in climate financing under a broader $1.4 billion support package aimed at mitigating environmental risks.

The IMF emphasised national targets that include limiting the development of coal-fired power plants, promoting the use of electric vehicles, and reducing greenhouse gas emissions by 15 per cent by 2030. The government has committed to increasing the share of renewable energy in the national energy mix, while the IMF has stressed the importance of integrating green budget tagging and disaster risk budgeting into fiscal planning.

“Pakistan’s capacity to manage environmental challenges remains weak, and external climate shocks impose significant financial burdens, affecting public projects and the broader economy,” an IMF official noted. The Fund acknowledged progress made by Pakistan with support from multilateral and bilateral partners but urged greater resilience to safeguard development gains.