The International Monetary Fund (IMF) said on Saturday it will closely examine Pakistan’s fiscal response to the deadly floods as part of its next Extended Fund Facility (EFF) review.
Mahir Binici, the IMF’s resident representative in Pakistan, said the mission will assess whether the government’s FY26 budget, spending plans, and emergency provisions are flexible enough to meet the massive reconstruction and relief needs caused by the disaster.
The floods, which have already claimed at least 972 lives, have swept through Punjab and are now hitting Sindh, wiping out crops, livestock, and homes. Officials fear the damage could trigger a fresh wave of food inflation and intensify the struggles of vulnerable families.
Economic experts warn that agricultural destruction could shave up to 0.2 percentage points off national growth this year, with reconstruction demand only partly offsetting the losses. A Reuters poll suggested the State Bank of Pakistan is likely to hold its key interest rate at 11 percent on Monday, as policymakers weigh rising inflation risks against a slowing economy.
Earlier in May, the IMF approved a $1.4 billion loan to help Pakistan build resilience against climate shocks and natural disasters. However, further disbursements remain conditional on the successful completion of periodic program reviews.
The Global Climate Risk Index ranks Pakistan among the most climate vulnerable nations, underscoring the urgent need for disaster-ready fiscal planning and stronger social safety nets.
