IMF to Decide $1.2 Billion Loan Tranche for Pakistan in December

Islamabad: The International Monetary Fund (IMF) Executive Board is expected to meet in December to approve a $1.2 billion loan tranche for Pakistan under the Extended Fund Facility (EFF).

According to official sources, the IMF meeting will also consider an additional $200 million in climate resilience financing to help Pakistan recover from recent flood damage. The funds will be provided under the Climate Resilience Financing initiative, which supports countries affected by climate disasters.

Pakistan and the IMF reached a staff-level agreement on October 15, and officials from the Ministry of Finance are confident that the next tranche will be approved without major hurdles.

The IMF has asked Pakistan for updated economic data to reflect the impact of floods on the economy. The Fund estimates that Pakistan’s GDP growth could fall by 0.25 to 0.5 percent, lowering the growth forecast to 3.25–3.5 percent for the current fiscal year.

The agriculture sector is expected to be the hardest hit, with reduced productivity due to flood-related damages.

The IMF is also reviewing the Federal Board of Revenue’s (FBR) tax collection targets amid concerns over an economic slowdown. Pakistan has assured the Fund it will take corrective measures if tax targets are missed, and a revised tax plan will be shared soon.

Meanwhile, the country’s current account deficit is expected to widen this year and could reach 1 percent of GDP within the next five years.