ISLAMABAD: Pakistan and the International Monetary Fund (IMF) have made “significant progress” on the first review of a $7 billion loan program Islamabad secured last year, the IMF mission chief said on Friday.
The South Asian country, which has faced an economic meltdown in recent years, is treading a long path to economic recovery under the $7 billion IMF program it secured in Sept. last year.
An IMF mission visited Pakistan from Feb. 24 till Mar. 14 to analyze Islamabad’s progress on key conditions as part of the first review of the facility. A successful review will result in the release of around $1 billion as second installment under the program.
In a statement on Friday, IMF Mission Chief Nathan Porter said the two sides made significant progress toward reaching a staff-level agreement on the first review under the 37-month program, and they would continue policy discussions virtually to finalize the review over the coming days.
“Program implementation has been strong, and the discussions have made considerable progress in several areas including the planned fiscal consolidation to durably reduce public debt, maintenance of sufficiently tight monetary policy to maintain low inflation, acceleration of cost-reducing reforms to improve energy sector viability, and implementation of Pakistan’s structural reform agenda to accelerate growth, while strengthening social protection and rebuilding health and education spending,” Porter said.
Pakistan’s Prime Minister Shehbaz Sharif and Finance Minister Muhammad Aurangzeb have previously said they were confident of meeting targets of the IMF program.
The South Asian country was able to build some trust with the IMF by completing a short-term, nine-month program last year. Previous loan programs in Pakistan ended prematurely or saw delays after the governments at the time faltered on meeting key conditions.
Pakistan also seeks to secure an additional $1.5 billion loan from the IMF to deal with climate-related issues under a Resilience and Sustainability Facility (RSF) arrangement.
“Progress has also been made in discussions on the authorities’ climate reform agenda, which aims to reduce vulnerabilities from natural disasters-related risks, and accompanying reforms which could be supported under a possible arrangement under the Resilience and Sustainability Facility (RSF),” Porter said.
“The IMF team is grateful to the Pakistani authorities, private sector, and development partners for fruitful discussions and their hospitality throughout this mission.”
Pakistan, IMF make ‘significant progress’ on first review of $7 billion program — IMF mission chief
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Pakistan, IMF make ‘significant progress’ on first review of $7 billion program — IMF mission chief
- The development comes as an IMF mission concluded its weeks-long visit to Pakistan to review Islamabad’s progress on key conditions under the program
- Progress has also been made in discussions on Pakistan’s climate reform agenda, which aims to reduce natural disasters-related vulnerabilities, IMF says
Pakistan terms climate change, demographic pressures as ‘pressing existential risks’
- Pakistan has suffered frequent climate change-induced disasters, including floods this year that killed over 1,000
- Pakistan finmin highlights stabilization measures at Doha Forum, discusses economic cooperation with Qatar
ISLAMABAD: Pakistan’s Finance Minister Muhammad Aurangzeb on Saturday described climate change and demographic pressures as “pressing existential risks” facing the country, calling for urgent climate financing.
The finance minister was speaking as a member of a high-level panel at the 23rd edition of the Doha Forum, which is being held from Dec. 6–7 in the Qatari capital. Aurangzeb was invited as a speaker on the discussion titled: ‘Global Trade Tensions: Economic Impact and Policy Responses in MENA.’
“He reaffirmed that while Pakistan remained vigilant in the face of geopolitical uncertainty, the more pressing existential risks were climate change and demographic pressures,” the Finance Division said.
Pakistan has suffered repeated climate disasters in recent years, most notably the 2022 super-floods that submerged one-third of the country, displaced millions and caused an estimated $30 billion in losses.
This year’s floods killed over 1,000 people and caused at least $2.9 billion in damages to agriculture and infrastructure. Scientists say Pakistan remains among the world’s most climate-vulnerable nations despite contributing less than 1 percent of global greenhouse-gas emissions.
Aurangzeb has previously said climate change and Pakistan’s fast-rising population are the only two factors that can hinder the South Asian country’s efforts to become a $3 trillion economy in the future.
The finance minister noted that this year’s floods in Pakistan had shaved at least 0.5 percent off GDP growth, calling for urgent climate financing and investment in resilient infrastructure.
When asked about Pakistan’s fiscal resilience and capability to absorb external shocks, Aurangzeb said Islamabad had rebuilt fiscal buffers. He pointed out that both the primary fiscal balance and current account had returned to surplus, supported significantly by strong remittance inflows of $18–20 billion annually from the Middle East and North Africa (MENA) and Gulf Cooperation Council (GCC) regions.
Separately, Aurangzeb met his Qatari counterpart Ali Bin Ahmed Al Kuwari to discuss bilateral cooperation.
“Both sides reaffirmed their commitment to strengthening economic ties, particularly by maximizing opportunities created through the newly concluded GCC–Pakistan Free Trade Agreement, expanding trade flows, and deepening energy cooperation, including long-term LNG collaboration,” the finance ministry said.
The two also discussed collaboration on digital infrastructure, skills development and regulatory reform. They agreed to establish structured mechanisms to continue joint work in trade diversification, technology, climate resilience, and investment facilitation, the finance ministry said.
