Pakistan Asks IMF to Revise Economic Plans Post-Flood

Pakistan has urged the International Monetary Fund (IMF) to revise its economic framework due to recent flood damage. Officials said the country’s GDP growth may drop from 4.2% to 3.5% this fiscal year. The government asked the IMF to update projections to reflect losses caused by the disaster. This request followed differences between Pakistan’s and the IMF’s growth estimates during recent talks. The floods have significantly affected both agriculture and industrial output.

Pakistani officials informed the IMF that inflation could rise to 8% due to global commodity price increases. They also said foreign exchange reserves are expected to stay near $15 billion by the fiscal year’s end. Meanwhile, the IMF warned that regional instability could further harm Pakistan’s external economic position. The Fund also highlighted risks from external shocks and volatile commodity prices. These factors could add pressure on growth and inflation.

Both Pakistan and the IMF are preparing to finalize a new Memorandum of Economic and Financial Policies (MEFP). The updated MEFP may include new structural benchmarks for the next review. Discussions have also focused on revising provincial budget surplus targets. This move aims to adjust fiscal policies in response to the flood’s impact. The government is working to align policies with the country’s new economic realities.

To assess the flood damage accurately, Pakistan has requested help from the World Bank, Asian Development Bank, European Union, and UNDP. These organizations will assist with a detailed post-disaster needs assessment. The government plans to share updated and verified loss estimates with the IMF soon. This information will help adjust the economic framework realistically. It will also guide recovery and rebuilding efforts.

Overall, Pakistan’s dialogue with the IMF highlights the economic challenges caused by the floods. Both sides aim to revise plans to support growth amid adversity. The government’s proactive approach seeks to strengthen economic stability. Accurate assessments and updated policies will help Pakistan recover more effectively. This cooperation marks a critical step in managing the country’s post-flood economic future.