'Factor in flood losses': Pakistan PM Shehbaz Sharif presses IMF ahead of $7 billion programme review

PM says Pakistan is meeting IMF targets but warns flood-hit economy needs flexibility

Pakistan Prime Minister Shehbaz Sharif has urged the International Monetary Fund (IMF) to account for the impact of record floods as the country heads into a crucial review of its $7 billion Extended Fund Facility (EFF).

Speaking to IMF Managing Director Kristalina Georgieva on the sidelines of the UN General Assembly in New York, Sharif said that while Pakistan is on track to meet all commitments, the devastation caused by monsoon rains has altered the economic picture.

“While emphasising that Pakistan was making steady progress towards meeting the various targets and commitments under the IMF programme, the prime minister said that the impact of the recent floods on Pakistan's economy must be factored into the IMF's review,” the Press Information Department (PID) said in a statement, quoted by Dawn.

Floods swamp farmland, strain economy

The floods since June have inundated large parts of Punjab and Sindh, destroying crops and disrupting industry.

According to GEOGLAM, at least 220,000 hectares of rice fields were submerged between August 1 and September 16. Punjab’s disaster management authority reported 1.8 million acres of farmland underwater, crippling the agriculture sector that had been projected to drive Pakistan’s recovery.

The government had earlier expected the economy to grow at 4.2 percent in 2026, powered by farming and manufacturing gains under the IMF bailout. That forecast now looks shaky in the wake of climate shocks.

IMF expresses sympathy, praises reforms

Georgieva expressed sympathy for flood-affected communities and stressed the importance of a thorough damage assessment to prioritise recovery. She also praised Sharif’s reform push.

According to the PID statement, she lauded his “commitment to pursuing sound macro-economic policies” and reaffirmed the IMF’s support for Pakistan’s programme.

Sharif, in turn, acknowledged the IMF’s assistance through multiple facilities: the $3 billion Stand-By Arrangement (FY24), the $7 billion EFF, and the $1.4 billion Resilience and Sustainability Facility (RSF).

“Today, with the institution of deep-rooted structural reforms, Pakistan’s economy [is] showing positive signs of stabilisation and is now moving towards recovery,” he said, as cited by Dawn.

Sharif also courts World Bank support

Separately, Sharif met World Bank Group President Ajay Banga and welcomed the bank’s new $40 billion Country Partnership Framework (CPF) for Pakistan.

He briefed Banga on reforms covering resource mobilisation, energy sector restructuring, privatisation, and climate resilience measures, saying these steps had stabilised the economy, boosted investor confidence, and set Pakistan on a path of sustainable growth.

The World Bank president assured Islamabad of continued support under the CPF, particularly for long-term climate resilience projects. Both sides agreed to deepen cooperation in implementing Pakistan’s development priorities.