ISLAMABAD: Pakistan is set to receive positive news from the IMF soon, as negotiations enter the final stages without major hurdles, Finance Minister Muhammad Aurangzeb said on Friday.
Speaking to journalists, the minister reassured that Pakistan is on track to meet the IMF’s economic discipline targets. He emphasised that discussions with the global lender are progressing smoothly and that the ongoing talks will conclude soon.
Aurangzeb underscored the government’s commitment to economic reforms, adding that Pakistan is adhering to the agreed-upon financial framework.
He noted that the country remains focused on fiscal responsibility, which will help secure the next tranche of funding.
Pakistan and the IMF have made significant progress towards reaching a Staff-Level Agreement (SLA) on the first review of the $7 billion loan programme.
IMF Mission Chief to Pakistan Nathan Porter, in a statement last week after concluding his visit, said: “The IMF and the Pakistani authorities made significant progress toward reaching a Staff Level Agreement on the first review.”
The IMF team, led by Porter, was in Pakistan from February 24 to March 14 to hold discussions on the first review of Pakistan’s economic programme supported by the EFF and the possibility of a new arrangement under the lender’s Resilience and Sustainability Facility (RSF).
The country’s latest loan programme, secured by the Prime Minister Shehbaz Sharif-led government last year, has played a key role in stabilising Pakistan’s economy and the government has said the country is on course for a long-term recovery.
If the IMF approves the first review of the loan, the country is in line to receive about $1bn as the second instalment of the loan package.
Structured climate financing system
Separately, while addressing an event, the finance minister spoke about the growing challenges posed by climate change. He highlighted the rapid melting of glaciers, the economic disruptions caused by fog in Lahore, and the country’s overall vulnerability to environmental shifts.
Aurangzeb stressed the need for a structured climate financing system to combat these threats. He revealed that Pakistan had held positive discussions with the IMF over the past two weeks regarding climate financing and disaster recovery.
He further disclosed that international donors have pledged $10 billion for flood rehabilitation projects, but Pakistan has struggled to develop viable implementation plans to fully utilise the assistance. He urged the need for practical and actionable climate projects to secure future funding.
The minister acknowledged that pollution levels are rising and controlling environmental degradation remains a significant challenge. He affirmed that the finance ministry would extend full cooperation to the climate change ministry to address these concerns.
Pakistan’s water cycle has been adversely affected, and insufficient winter rainfall signals a growing environmental crisis, FinMin Aurangzeb warned. The minister stressed that climate change and population growth are two major threats that the country must tackle urgently.
Aurangzeb also noted progress in Pakistan’s partnership with the World Bank, particularly in financing and capacity building for climate resilience. He cited the work done by the Everest K2 Research Centre as a positive step in understanding glacial melt patterns and their impact on water resources.
Emphasising the urgency of the matter, the finance minister called for reducing project timelines to counter environmental risks effectively. He reiterated that failure to address climate challenges would have severe economic consequences for Pakistan.