Finance Minister Muhammad Aurangzeb on Monday said that the government was focused on developing a “strategic” federal budget for the fiscal year 2025-2026.

Pakistan and the International Monetary Fund (IMF) had opened high-level policy talks in Islamabad on May 19 to discuss the FY2025-26 budget. As deliberations with the IMF remained inconclusive, the government has postponed the budget announcement till June 10.

While speaking at an event in Islamabad, the finance minister said they were working on a “strategic budget” instead of “just making the math work”.

He said that the “DNA” of the economy had to change.

“And therefore we are going to bring some bold measures during the budget because the budget is not just about revenue and expenditure but has to provide the strategic direction where the economy is and where it is heading,” he said.

“So it’s our full effort to make this document more strategic, rather than just making the math work,” he said. “Of course, we have to make the math work.”

On debt servicing cost, he noted that it had gone down “by a trillion rupees”.

“And next year, what we are going to do, god willing, is to restructure and reorganise our debt management office along modern lines in terms of international best practices,” he said.

He observed that the country was heavily dependent on imports, leading to a foreign exchange issue and a balance of payment crisis.

“We go running back to the lenders as the last resort, the reason why we are in the 24th IMF programme … let’s be very clear about this because all of us have had enough boom and bust cycles,” he added.

In terms of structural reforms, he reiterated the government’s resolve to “stay the course” on the taxation side; people, process, and technology framework; and digitalisation of the Federal Board of Revenue (FBR).

On the public financing side, the finance minister said, “Its important that whatever we are doing — including the rightsizing of the federal government — we are taking it in waves rather than a big bang approach and we will continue on that journey.”

Last year, Aurangzeb presented his first federal budget with a total outlay of Rs18.9 trillion, which analysts said was broadly “in line with IMF guidelines”.

Aurangzeb, during the budget presentation, had said that the goal was to widen the tax base to avoid burdening existing taxpayers.

Pakistan’s total revenue for the current fiscal year was budgeted at Rs17,815bn. After accounting for provincial transfers of Rs7,438bn, the net revenue stood at Rs10,377bn, representing a significant 48.7pc increase from the fiscal year 2023-24.