Prime Minister Shehbaz Sharif has urged the International Monetary Fund to weigh the impact of recent floods in Pakistan while considering the bailout programme.
“We are making steady progress towards meeting programme targets, but the devastation caused by the floods may please be considered in the IMF’s review,” Sharif mentioned during his meeting with the International Monetary Fund (IMF) Managing Director, Kristalina Georgieva in New York.
The press statement, released from the PM office, appreciated the IMF’s “longstanding constructive partnership” with Pakistan, saying it had “further strengthened under Ms Georgieva’s leadership.”
The statement highlighted the IMF’s timely support through a $3 billion Stand-By Arrangement in FY2024, followed by a $7 billion Extended Fund Facility (EFF) and a $1.4 billion Resilience and Sustainability Facility (RSF).
Sharif added that Pakistan’s economy was “showing positive signs of stabilisation and moving towards recovery with deep-rooted structural reforms,” crediting IMF support for guiding the reform process.
Read: Flood danger recedes across Pakistan, rehabilitation begins
According to the PM Office, Georgieva expressed sympathy with the flood-affected population and stressed that “damage assessment will be critical to underpin recovery priorities.” She commended the premier’s “commitment to pursuing sound macroeconomic policies” and reiterated the IMF’s continued support for Pakistan.
Government of Pakistan posted on X about the visit
IMF Mission
A high-level mission of the IMF is scheduled to visit Islamabad from September 25 to October 8 for the second review of Pakistan’s economy under the EFF, and to determine the release of the third tranche of $1 billion loan.
“The mission will assess whether the FY26 budget, its spending allocations and emergency provisions remain sufficiently agile to address the spending needs necessitated by the floods,” said Mahir Binici, the IMF’s resident representative in Pakistan.
The team will evaluate whether Pakistan’s fiscal policies and emergency measures are adequate to cope with the crisis. Finance Minister Muhammad Aurangzeb said Pakistan has been in close contact with the IMF, which has “shown understanding” of the challenges triggered by the floods.
Read more: Flash floods cause Rs650m damage to Faisalabad irrigation infrastructure
Planning Minister Ahsan Iqbal separately called on the Fund to “help mitigate the flood damages”. IMF’s board earlier approved a fresh $1.4 billion loan in May to strengthen Pakistan’s economic resilience to climate vulnerabilities and natural disasters, with further disbursements contingent on successful programme reviews.
Flood Relief & Reviews
The IMF has continuously expressed “deep sorrow” and condolences” over the loss of lives in Pakistan’s devastating floods and confirmed that its review mission would also assess the disaster’s impact on the economy and the financial requirements for recovery and reconstruction.
In a separate move, the government has sought IMF approval for relief in electricity bills in flood-hit areas. PM has asked the Ministry of Finance to secure IMF consent for a waiver, and authorities requested a three-month deferral of bills, citing a similar measure taken in 2022. 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, given the scale of the losses. Work is underway on a farmer support package modeled on the one introduced after the 2022 floods.
