Economists warn floods could weigh on Pakistan’s economy as IMF clears $1.2 billion in reviews
KARACHI: Pakistani economists warned this week that recent floods could weigh down the national economy, even as the International Monetary Fund (IMF) approved Islamabad’s economic performance in its latest reviews under two lending programs this week, paving the way for the release of $1.2 billion.
The IMF announced on Tuesday that it had reached a staff-level agreement with Pakistan on the second review of its $7 billion Extended Fund Facility (EFF) and the first review of the $1.4 billion Resilience and Sustainability Facility (RSF).
The agreement, pending approval by the Fund’s executive board, will provide balance-of-payments support and strengthen the country’s capacity to respond to climate shocks.
“This time, the government has this fiscal pressure, and this is a key risk,” said Muhammad Waqas Ghani, head of research at JS Global Capital Ltd., referring to flood losses estimated at around $3.5 billion.
