Pakistan has moved closer to securing a staff-level agreement with the International Monetary Fund after the lender shared a draft of the Memorandum of Economic and Financial Policies (MEFP) with the government, according to officials familiar with the matter.

The agreement is expected to be finalized once consensus is reached on the draft, marking progress in ongoing negotiations tied to the next review under the country’s loan programme.

The draft outlines updated reform and performance targets for key economic institutions, including the Ministry of Finance, Ministry of Energy, Ministry of Petroleum and the Federal Board of Revenue. Regulators such as the Oil and Gas Regulatory Authority, National Electric Power Regulatory Authority and the Securities and Exchange Commission of Pakistan, along with provincial governments, have also been assigned new benchmarks under the proposed framework.

In a notable shift, the policy framework includes new taxation targets related to agricultural income, signaling an expansion of the tax base as authorities seek to strengthen revenue mobilization.

Officials said the draft will be returned to the IMF for final clearance once both sides reach agreement on the proposed measures.

Separately, a government plan aimed at addressing circular debt in the gas sector has not been incorporated into the current draft, suggesting the issue remains unresolved at this stage.

An IMF delegation is expected to visit Pakistan toward the end of next month to begin formal discussions on the FY2026–27 federal budget, with a technical mission assisting authorities in aligning fiscal projections with the Fund’s analytical framework. The team is likely to remain in the country through May to support budget preparation and ensure compliance with agreed economic targets.