Washington-(Mudassar Iqbal)-Pakistan is seeking an additional $2 billion from the International Monetary Fund (IMF) to tackle its climate change challenges. This request comes after the country’s earlier plea for climate financing was rejected by the IMF. Finance Minister Muhammad Aurangzeb will present this request at the annual IMF meetings scheduled for later this month.
Pakistan’s Climate Change Challenges
Pakistan is among the top 10 countries most affected by climate change and natural disasters ¹. Rising temperatures, sea-level rise, and extreme weather events have severe impacts on the country’s ecosystems, people, settlements, and infrastructure. The 2022 floods alone caused damages exceeding $14.9 billion and economic losses of $15.2 billion.
Government Measures
To address these challenges, the government has implemented measures to ensure fiscal sustainability and increase revenue. These include:
– FY24 Budget: Targeting a primary surplus of approximately 0.4% of GDP
– Market-Determined Exchange Rate: Maintaining a flexible exchange rate
– Inflation Reduction: Commitment to reducing inflation
IMF Support
Pakistan has already secured a 37-month Extended Fund Facility (EFF) arrangement of about $7 billion from the IMF. On September 27, the country requested an additional $1.5 billion loan to combat climate change impacts. The requested loan aims to support Pakistan’s Climate Resilience and Sustainability Facility.
IMF Meetings
Minister Aurangzeb will attend the IMF meetings alongside the Secretary of Finance and State Bank officials. The meetings are set to conclude by October 26. The outcome of these meetings will be crucial in determining Pakistan’s ability to tackle its climate change challenges.
