Prime Minister Shehbaz Sharif has asked the International Monetary Fund to factor in the impact of Pakistan’s recent floods while underwent the country’s bailout program.
“We are making constant progress towards fulfillment program goals, but the destruction caused by the floods must be reflected in the IMF review,” Sharif told International Monetary Fund (IMF) CEO Kristalina Georgieva during their New York meeting.
PM Office’s press release valued the IMF’s “long -term constructive partnership” with Pakistan and said it “was further strengthened under Mrs. Georgieva’s leadership.”
The declaration highlighted the IMF’s timely support through a $ 3 billion stand-by event in FY2024, followed by an expanded $ 7 billion (EFF) funding facility and a $ 1.4 billion resistance and sustainability facility (RSF).
Sharif added that Pakistan’s economy “showed positive signs of stabilization and moved against improvement with deeply rooted structural reforms” that credited the IMF support to guide the reform process.
Read: The flooding hazard disappears over Pakistan, rehabilitation begins
According to the PM office, Georgieva expressed sympathy with the flooded population and emphasized that “injury assessment will be critical for supporting recovery priorities.” She praised the premiere’s “commitment to pursuing sound macroeconomic policies” and repeated the IMF’s continued support to Pakistan.
Pakistan’s government released on x about the visit
IMF Mission
The IMF sends a mission to Islamabad from September 25 to October 8 for the second review of Pakistan’s economy under EFF, which will determine the release of the third loan trafficking of $ 1 billion.
“The mission will assess whether the FY26 budget, its consumption distributions and emergency provisions remain sufficiently flexible to meet the needs of the expenses needed by the floods,” said Mahir Binici, IMF’s resident representative in Pakistan.
The team will evaluate whether Pakistan’s fiscal policy and emergency measures are sufficient to cope with the crisis. Finance Minister Muhammad Aurangzeb said Pakistan has been in close contact with the IMF, who has “shown understanding” of the challenges triggered by the floods.
Read more: Flash flooding causes RS650M damage to Faisalabad Irrigation Infrastructure
Planning Minister Ahsan Iqbal called on the separate fund to “help us mitigate the damage”. The IMF Board of Directors previously approved a new loan of $ 1.4 billion in May to strengthen Pakistan’s financial resistance to climate venerability and natural disasters, with additional payments conditioned by successful program reviews.
Flooding institution and reviews
The IMF has continuously expressed “deep grief” and “deep compassion” over the loss of life in Pakistan’s devastating floods and confirmed that its review mission will also assess the financial impact of the disaster and the financial demands of improvement and reconstruction.
In a separate step, the government has sought IMF approval for exemption in electricity bills in flood areas. PM has asked the Ministry of Finance to secure the IMF conservation and the authorities requested a three-month postponement of bills with reference to a similar measure in 2022. The IMF officials have sought additional data from the Power Division.
The Ministry of Finance is also considering requesting flexibility in the IMF-mandated targets for the primary budget surplus and the provincial cash surplus considering the losses. Work is underway on a Farmer Support package modeled on the one introduced after the floods in 2022.
