Pakistan is preparing to host two International Monetary Fund (IMF) staff missions in the coming weeks. These missions will discuss over $1 billion in climate resilience funding and review the ongoing $7 billion Extended Fund Facility (EFF).
IMF Team to Discuss Climate Resilience Financing
A policy-level IMF staff mission will arrive in Pakistan on February 24. The delegation will hold discussions regarding Pakistan’s request for more than $1 billion under the Resilience and Sustainability Facility (RSF).
The RSF provides funding to nations that commit to reforms aimed at strengthening resilience against climate disasters. The loan has a 30-year repayment period, including a 10-year grace period. It also comes with lower interest rates compared to the EFF.
Pakistan formally requested a $1.2 billion top-up to its existing $7 billion EFF in October 2024. The government seeks additional funds to support climate adaptation measures and improve disaster preparedness.
Performance Review of $7 Billion EFF
Another IMF mission is expected in the first week of March. This team will conduct the first biannual review of Pakistan’s $7 billion EFF. The review will assess Pakistan’s progress on fiscal and structural reforms.
Government officials are working to meet the required benchmarks before the mission arrives. One of the latest reforms includes a mechanism for publishing the assets and tax returns of top government officials. The federal cabinet recently approved this initiative to promote transparency.
Pakistan Seeks IMF Support for Energy Reforms
Prime Minister Shehbaz Sharif recently met IMF Managing Director Kristalina Georgieva in Dubai. They discussed Pakistan’s efforts to reform its energy sector. The government aims to secure IMF support for policies that address inefficiencies and financial losses in the sector.
The IMF has recommended that Pakistan allocate at least 1% of its GDP annually for climate resilience initiatives. This amounts to over Rs1.24 trillion in the current fiscal year. The country faces increasing climate challenges, including floods and extreme weather events, making investment in climate adaptation essential.
Challenges and Expectations
Pakistan’s authorities are under pressure to meet IMF conditions. The government has already taken several measures to improve revenue collection and enhance economic stability. However, challenges remain in reducing fiscal deficits and implementing structural reforms.
The upcoming IMF missions will determine the country’s progress and future financing options. Successful negotiations could provide much-needed economic relief and enhance Pakistan’s climate resilience efforts.
Pakistan is set to engage with the IMF on crucial financial matters in the coming weeks. The discussions on climate resilience funding and economic reforms will shape the country’s financial stability. Meeting the IMF’s requirements will be key to securing additional support and ensuring sustainable economic growth.
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