Prime Minister Shehbaz Sharif has asked the International Monetary Fund to take into account the impact of Pakistan’s recent floods while reviewing the country’s rescue program.
“We are making constant progress towards the objectives of the meetings program, but the devastation caused by floods should be reflected in the IMF review,” Sharif told the managing director of International Monetary Fund (IMF) Kristalina Georgieva during his meeting in New York.
The press release of the Prime Minister’s office appreciated the “Long Data Construction Association” of the IMF with Pakistan, saying that it had “strengthened even more under the leadership of Mrs. Georgieva.”
The statement highlighted the timely support of the IMF through a waiting agreement of $ 3 billion in the fiscal year2024, followed by an installation of extended funds (EFF) of $ 7 billion and a resilience and sustainability installation of $ 1.4 billion (RSF).
Sharif added that Pakistan’s economy was “showing positive stabilization signs and advancing towards recovery with deep structural reforms”, proving the support of the IMF to guide the reform process.
Read: The danger of flooding goes in Pakistan, rehabilitation begins
According to Prime Minister’s office, Georgieva expressed sympathy with the population affected by floods and emphasized that “the damage evaluation will be critical to underpin recovery priorities.” He praised the “commitment of the prime minister to seek solid macroeconomic policies” and reiterated the continuous support of the IMF to Pakistan.
Pakistan government published in X on the visit
IMF mission
The IMF will send a mission to Islamabad from September 25 to October 8 for the second review of Pakistan’s economy under the EFF, which will determine the release of the third section of loan of $ 1 billion.
“The mission will evaluate whether the FY26 budget, its assignments of expenses and emergency provisions remain agile enough to address the necessary expenses needs for floods,” said Mahir Binici, representative of the IMF resident in Pakistan.
The team will evaluate whether Pakistan’s fiscal policies and emergency measures are adequate to deal with the crisis. The Minister of Finance, Muhammad Aurengzeb, said that Pakistan has been in close contact with the IMF, which has “shown understanding” of the challenges caused by floods.
Read more: Sudden floods cause damage to RS650m to Faisalabad irrigation infrastructure
The planning minister, Ahsan Iqbal, requested separately the fund that “helps us mitigate the damage.” The IMF Board previously approved a new loan of $ 1.4 billion in May to strengthen Pakistan’s economic resilience to climatic vulnerabilities and natural disasters, with additional disbursements depending on successful programs reviews.
Flood and review relief
The IMF has continually expressed “deep sadness” and “deep condolences” about the loss of lives in the devastating floods of Pakistan and confirmed that its review mission will also evaluate the economic impact of the disaster and the financial requirements for recovery and reconstruction.
In a separate movement, the government has sought the approval of the IMF for relief in electricity invoices in areas affected by floods. The Prime Minister has asked the Ministry of Finance to ensure the consent of the IMF for an exemption, and the authorities requested a postponement of three months invoices, citing a similar measure in 2022. IMF officials have sought additional data of the energy division.
The Ministry of Finance is also considering requesting flexibility in the mandatory objectives of the IMF for the primary budget surplus and the provincial cash surplus, given the scale of the losses. The work is underway in a supporting support package modeling in the introduced after the floods of 2022.
