Islamabad: The International Monetary Fund (IMF) Executive Board will meet in December to consider a $1.2 billion tranche for Pakistan under the Extended Fund Facility (EFF). This tranche includes $200 million through the Climate Resilience Financing initiative. Officials at the Ministry of Finance remain hopeful that the tranche will be approved smoothly following the staff-level agreement signed on October 15, 2025.
The IMF has requested updated economic data from Pakistan to assess the impact of recent floods. Preliminary reports indicate that the disaster has affected key sectors, potentially lowering GDP growth by 0.25 to 0.5 percent. The Fund now projects Pakistan’s GDP growth between 3.25 and 3.5 percent for the current fiscal year. The agricultural sector, in particular, is expected to face reduced productivity due to flood damages.
Read more: Recent floods seriously hurt Pakistan’s economy: IMF
Authorities may need to revise tax and fiscal targets amid concerns about the economic slowdown. Sources said Pakistan assured the IMF it would take necessary measures if Federal Board of Revenue (FBR) targets are missed. A revised tax plan is expected to be submitted to the IMF soon, reflecting the government’s commitment to fiscal discipline.
The IMF also highlighted that Pakistan’s current account deficit may widen this fiscal year. Officials project the deficit could reach one percent of GDP within the next five years if current trends continue. The review will help the Fund evaluate Pakistan’s macroeconomic stability and ensure compliance with EFF conditions.
Read more: Future rate cuts tied to flood impact, IMF review: SBP governor
Meanwhile, Pakistani authorities are working to provide the required economic updates and assurances. They emphasized continued cooperation with the IMF to secure timely tranche release, support flood recovery, and sustain economic reforms. The December decision will be closely watched by investors and policymakers alike.