Govt assures IMF: New projects to get allocations below 10pc of total budget

ISLAMABAD: The government has committed to the International Monetary Fund (IMF) that allocations for new projects in the fiscal year 2027 budget will remain below 10 percent of the total, as much of the limited fiscal space will be required to complete ongoing projects.

This was noted in the Letter of Intent (LoI) submitted to IMF which is signed by Muhammad Aurangzeb Minister of Finance and Revenue and Governor of State Bank of Pakistan Jameel Ahmad.

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The Fund report noted that Public Sector Development Programme (PSDP) for next fiscal year 2027 is projected at Rs 986 billion against Rs 873 billion projected for the outgoing fiscal year.

Pakistani authorities informed the Fund that a new project appraisal framework for the PSDP has been finalised, which will be presented to ECNEC for approval by end-June 2026.

“We expect that new project allocations will be less than 10 percent of the total in the FY27 budget, as much of the limited fiscal space will be needed to complete existing projects. We are revising our scorecard-based system for project selection to: (i) reduce the number of overlapping criteria; (ii) introduce negative marking for projects with negative externalities; and (iii) increase the weight on climate-related criteria,” LOI noted.

Copyright Business Recorder, 2026