IMF mission to review Pakistan’s economic program as floods strain finances

An International Monetary Fund (IMF) mission will visit Pakistan in the coming weeks to review the country’s economic program under the Extended Fund Facility, with a focus on fiscal flexibility as devastating floods continue.

“The upcoming EFF review mission provides an opportunity to discuss the appropriate policy response to support flood-affected populations and protect the most vulnerable,” IMF representative in Pakistan Mahir Binici said in a statement sent to Nukta on Sunday.

The mission will examine whether the fiscal year 2026 budget, its spending allocations, and emergency provisions are flexible enough to meet flood-related needs.

The IMF extended condolences as monsoon rains triggered widespread flooding. “We extend our heartfelt condolences to the people of Pakistan as they endure the devastating floods. We are deeply saddened by the tragic loss of life,” the representative said.

Damage assessments are still under way. “An assessment of the flood damage caused by torrential monsoon rains is still ongoing, as the situation continues to evolve,” the IMF noted.

The IMF underscored the importance of its programs with Pakistan, including the Extended Fund Facility and the Resilience and Sustainability Facility. “These programs provide a critical policy and financing framework to help safeguard external and financial stability amid a challenging environment,” the representative said.

In May, the IMF board approved Pakistan’s request for an RSF arrangement, unlocking about $1.4 billion to support climate resilience and disaster preparedness. Disbursement of those funds, however, depends on Pakistan’s continued progress under the EFF.

“The disbursement of RSF funds is contingent upon successful completion of reviews under the EFF,” the representative added.

The IMF mission comes as Pakistan faces one of its worst natural disasters in years, with thousands displaced and key infrastructure damaged. The talks are expected to shape a coordinated response to the crisis while aiming to preserve economic stability.