**Islamabad, Pakistan** — The International Monetary Fund (IMF) announced its upcoming review mission will scrutinize Pakistan’s fiscal policies and emergency provisions to ensure they can effectively address the nation’s devastating flood crisis. The Washington-based lender expressed deep condolences on Saturday for the extensive loss of life caused by the deluges.
Mahir Binici, the IMF’s resident representative in Pakistan, stated, “The mission will assess whether the FY26 budget, its spending allocations and emergency provisions remain sufficiently agile to address the spending needs necessitated by the floods.” This review is part of the ongoing Extended Fund Facility (EFF) program.
According to the National Disaster Management Authority, the flash floods have tragically claimed 972 lives across the country so far. The widespread flooding has destroyed crops, livestock, and homes throughout the province of Punjab and is now extending into Sindh, raising concerns about potential fresh food inflation and deepening economic hardship for the population.
In response to the crisis, the State Bank of Pakistan is widely expected to maintain its key interest rate at 11 percent when it meets on Monday, according to a Reuters poll. Policymakers are reportedly weighing the inflation risks stemming from crop losses against the backdrop of a slowing economy. One analyst estimated that agricultural damage alone could shave up to 0.2 percentage points off economic growth this year, with reconstruction-led demand offering only a partial offset.
The IMF board had previously approved a $1.4 billion loan in May to help Pakistan strengthen its economic resilience to climate vulnerabilities and natural disasters. The disbursement of these funds, however, remains contingent upon the successful completion of reviews under the EFF. Pakistan is identified by the Global Climate Risk Index as one of the countries most vulnerable to the impacts of climate change.
