IMF, Pakistan kick off discussions as lender reviews $8.4 billion loan programs

IMF, Pakistan kick off discussions as lender reviews $8.4 billion loan programs
Pakistan's finance minister Muhammad Aurangzeb (fourth in left row) holds meeting with the visiting IMF delegation in Islamabad, Pakistan, on September 29, 2025. (IMF)
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Updated 29 September 2025

IMF, Pakistan kick off discussions as lender reviews $8.4 billion loan programs

IMF, Pakistan kick off discussions as lender reviews $8.4 billion loan programs
  • IMF mission arrived in Pakistan last week to hold separate reviews of $7 billion and $1.4 billion loan programs
  • Discussions take place as Pakistan eyes concessions in program targets from IMF following devastating floods

KARACHI: A visiting International Monetary Fund (IMF) mission kicked off talks with Pakistani officials on Monday as it holds the second review of its $7 billion External Fund Facility (EFF) and first review of the $1.4 billion Resilience and Sustainability Facility (RSF) loan programs for the country, the lender confirmed.

The IMF mission arrived in Pakistan on Sept. 25 to conduct the reviews. The global lender approved a $7 billion bailout package for Pakistan under its EFF program in September 2024 while in May, it approved a separate $1.4 billion loan for Pakistan as a climate resilience fund. The RSF will support Pakistan’s efforts in building economic resilience to climate vulnerabilities and natural disasters.

“Federal Minister for Finance and Revenue, Senator Muhammad Aurangzeb, chairing the kick-off meeting with the visiting IMF Review Mission at the Finance Division today,” the IMF said in a statement, sharing pictures of the meeting between the two sides.

The discussion takes place as Pakistan seeks concessions in its program targets following devastating floods that killed over 130 in its eastern Punjab province since late August, impacted over 4.5 million people and destroyed large swathes of crops. The devastation has spiked food prices in many parts of the country, with experts warning of food shortages due to supply chain disruptions.

Prime Minister Shehbaz Sharif met the fund’s Managing Director Kristalina Georgieva in New York last week on the sidelines of the ongoing United Nations’ General Assembly session. During the meeting, Sharif spoke about Pakistan’s progress in fulfilling the IMF program targets but also demanded that the impact of recent floods on Pakistan’s economy “must be factored into the IMF’s review,“

Islamabad has so far received more than $2 billion under the EFF and is expecting a third tranche of $1 billion after the second review concludes successfully.

IMF’s bailout packages have proven instrumental in keeping Pakistan’s fragile $350 billion economy afloat, as the country grapples with tough economic conditions that have triggered a balance of payments crisis and weakened its national currency.

Pakistan has undertaken painful measures in the past, such as removing subsidies that have resulted in higher food and fuel prices, spiking inflation in the country. Pakistani financial experts told Arab News last week they expected the global lender to grant Islamabad concessions as far as its program targets were concerned, in light of the damages inflicted by the recent floods.

“We are expecting Pakistan to get a little breather due to the floods,” economist Sana Tawfik said last week, adding that Islamabad would comfortably meet the international lender’s targets.

Shankar Talreja, head of research at brokerage firm Topline Securities Ltd., said the current review will focus on continuing the IMF’s reforms under revised parameters due to the floods. He said the government is expected to keep pushing for privatization of state-owned enterprises and clearing its old backlog of circular debt.

“The concessions are likely in form of some downward revisions in FBR (Federal Board of Revenue) tax revenue, upward revision in fiscal balance over relief spending and there might a downward adjustment in GDP growth target as well,” Talreja said.


Pakistan cuts growth forecast to 3.9 percent as government’s flood damage estimates top $1.3 billion

Pakistan cuts growth forecast to 3.9 percent as government’s flood damage estimates top $1.3 billion
Updated 10 sec ago

Pakistan cuts growth forecast to 3.9 percent as government’s flood damage estimates top $1.3 billion

Pakistan cuts growth forecast to 3.9 percent as government’s flood damage estimates top $1.3 billion
  • Preliminary assessment says agriculture sector suffered $546 million in losses from floods
  • Experts warn unplanned relief spending could worsen fiscal pressures under IMF program

ISLAMABAD: Pakistan has slashed its annual gross domestic product (GDP) growth forecast to 3.9 percent from an earlier target of 4.2 percent as devastating monsoon floods this year caused an estimated $1.3 billion (Rs371 billion) in damage, according to a preliminary government assessment seen by Arab News.

The revised outlook highlights how recurring climate disasters are undermining Pakistan’s fragile economic recovery, even as it implements structural reforms under a $7 billion International Monetary Fund (IMF) program. Monsoon rains and floods have killed over 1,000 people, affected more than 4.5 million since June 26, and submerged millions of acres of farmland and standing crops, according to disaster management authorities.

The damage estimates currently reflect losses only from Punjab province, and assessments in Sindh and other regions are still underway, suggesting the final toll could be significantly higher. The agriculture sector — which underpins food security and exports — is the hardest hit, suffering $546 million (Rs155 billion) in losses, with projected growth slowing from 4.5 percent to 4 percent, according to the government’s early report of damages. 

Crop production has borne the brunt of the loss, with key staples such as wheat, rice and cotton expected to see growth decline from 6.7 percent to 4.5 percent. The industrial sector is projected to sustain more modest losses of $105 million (Rs29.9 billion), with growth revised slightly downward from 4.3 percent to 4.2 percent, while the services sector faces losses of $652 million (Rs186 billion). The transport and storage sector incurred $259 million (Rs74 billion) in damages, and the information and communication sector will contract from 5.0 percent to 4.3 percent, losing $51 million (Rs14.5 billion). Education and health sectors have incurred combined losses of about $19 million (Rs5.6 billion).

Economic experts have urged the government to avoid “unplanned expenditures” for relief after the latest disaster that follows the 2022 cataclysmic deluges, which killed more than 1,700 people, affected 33 million and caused an estimated $30 billion in losses.

“In response to Pakistan’s appeal [for international assistance] after devastating 2022 floods, funds to the tune of $10.98 billion were committed, but apart from the Saudi oil facility and deferred payment relief, only 25 percent of the remaining amount was actually received,” Dr. Abid Qaiyum Suleri from the Islamabad-based Sustainable Development Policy Institute (SDPI) think tank, told Arab News. “The country should locally arrange climate funds annually to deal with floods and other disasters.”

Arab News contacted Climate Change Minister Musadik Malik and Finance Adviser Khurram Schehzad for comment on the government’s assessment and any plans for an international appeal but received no response.

Earlier this year, Pakistan and the World Bank signed a Country Partnership Framework worth $20 billion over the next decade to support the country’s development priorities, including climate adaptation, social protection and private-sector growth. The financing, which complements the ongoing IMF program, is intended to strengthen the country’s economic resilience in the face of recurring climate shocks like the latest monsoon floods.

Despite contributing less than 1 percent of global greenhouse gas emissions, Pakistan ranks among the countries most vulnerable to climate change. Experts warn that without urgent adaptation and mitigation measures, the human and economic toll of climate change in Pakistan will only deepen in the years ahead.

But Muhammad Waqas Ghani, head of research at the JS Global brokerage firm, warned the government against fiscal and external risks if it resorted to unplanned relief spending.

“Despite the scale of devastation in 2022, international assistance for Pakistan remained limited,” Ghani said. “Should the government now resort to unplanned expenditures on relief, restoration, and subsidies, it will create additional fiscal stress at a time when the country is already operating under strict IMF program targets.”

Damages to crops, livestock and textiles, which account for nearly 30 percent of Pakistan’s consumer price index, pose a “key downside risk to inflation forecasts,” while food imports and reduced textile and rice exports could worsen the external account, Ghani added.


Pakistani province to launch first government-run EV taxi service in December

Pakistani province to launch first government-run EV taxi service in December
Updated 29 September 2025

Pakistani province to launch first government-run EV taxi service in December

Pakistani province to launch first government-run EV taxi service in December
  • The country’s new EV policy targets 30 percent of all new vehicle sales to be electric by 2030
  • EVs are key to cutting transport emissions accounting for 10 percent of Pakistan’s carbon output

KARACHI: The Sindh provincial government on Monday announced it will launch Pakistan’s first government-run electric vehicle (EV) taxi service in December to give public access to modern, eco-friendly and high-quality travel services.

Electric vehicles are vital to reducing transport emissions, which make up about 10 percent of Pakistan’s carbon output and for cutting a $16 billion annual oil import bill, according to Pakistani government data.

In June, the South Asian country launched its new EV policy that aims to accelerate the country’s shift toward sustainable transport, reduce fossil fuel dependence and curb climate-warming emissions.

Speaking at a meeting of provincial officials, Sindh Information Minister Sharjeel Memon noted the provincial administration had already introduced eco-friendly EV buses for the first time in Pakistan.

“In the initial phase, some EV taxis will be reserved exclusively for women,” he was quoted as saying by the provincial information department.

The minister said their Pink Scooty program for women and female students has been widely appreciated by the masses, along with the Pink Bus service for women.

“Now, with the launch of the Pink EV taxi for women, the Sindh government is introducing the country’s first EV taxi service,” he added.

Pakistan, which has experienced erratic weather patterns that experts attribute to climate change, has joined a growing list of nations pushing for zero-emission mobility to curb climate change and urban pollution.

The country’s new EV policy targets 30 percent of all new vehicle sales to be electric by 2030 to cut its reliance on imported fossil fuels. EVs are also expected to offer long-term savings to customers through reduced fuel and maintenance costs.

The South Asian country of over 240 million plans to incentivize EV adoption through tax breaks, subsidies and infrastructure development, including nationwide charging stations.

Memon said the Sindh provincial government will soon run double-decker and additional EV buses to ease transport challenges in Karachi, the provincial capital and the country’s financial hub.

“Work is also underway to develop the necessary infrastructure and charging stations for EV vehicles to ensure the project is sustainable and successful,” he added.


Pakistan revenue watchdog says no extension in Sept. 30 deadline to file income tax returns

Pakistan revenue watchdog says no extension in Sept. 30 deadline to file income tax returns
Updated 29 September 2025

Pakistan revenue watchdog says no extension in Sept. 30 deadline to file income tax returns

Pakistan revenue watchdog says no extension in Sept. 30 deadline to file income tax returns
  • The statement comes after some reports suggest the Federal Board of Revenue has extended the deadline in view of recent floods
  • Taxpayers are cautioned that failure to file returns by the due date will result in late-filer status and penalties, the watchdog says

ISLAMABAD: Pakistan’s Federal Board of Revenue (FBR) on Monday rejected reports of an extension in deadline to file income tax returns for fiscal year 2024-25, saying Sept. 30 is final date for all Pakistanis to submit their wealth statements.

The statement came after some reports suggested the revenue watchdog had extended the deadline in view of the recent floods that killed more than 1,000 Pakistanis, uprooted nearly 3 million people and submerged standing crops on vast tracts of lands.

In a statement issued on Monday, the FBR said that all these reports were false, baseless and misleading and the deadline for filing income tax returns for Tax Year 2025 will not be extended.

“It is pointed out that a vast majority of taxpayers reside in areas unaffected by floods and have had ample time to discharge their national obligation of filing returns,” it said.

“Taxpayers are also cautioned that failure to file returns by the due date will result in late-filer status and imposition of penalties under the law.”

The South Asian country has one of the lowest tax-to-GDP ratios in the region, despite a population of more than 240 million, and has often failed to meet its collection targets.

In June, Prime Minister Shehbaz Sharif’s government set a record-high tax collection target of Rs14.13 trillion ($47.4 billion) for the fiscal year 2025–26, marking a 9 percent increase from the previous year.

Officials say meeting this goal is essential to reducing reliance on external debt and ensuring long-term fiscal sustainability.

“FBR urges all eligible taxpayers to act responsibly and file their Income Tax Returns with accuracy and honesty before the deadline of 30th September, 2025 to avoid any legal consequences,” the FBR said, denying reports about a slowdown of its tax returns filing platform, IRIS.

“In case of extreme hardship, the taxpayers can avail extension of return up to fifteen days with payment of due taxes by 30th September subject to approval by the relevant committee as per law.”


Pakistan to direct bulk of $2 billion annual World Bank funds to population challenge

Pakistan to direct bulk of $2 billion annual World Bank funds to population challenge
Updated 29 September 2025

Pakistan to direct bulk of $2 billion annual World Bank funds to population challenge

Pakistan to direct bulk of $2 billion annual World Bank funds to population challenge
  • Pakistan, World Bank have signed $20 billion decade-long partnership to support climate and growth
  • UNICEF, Pakistan discuss collaboration on climate resilience, education and child stunting

ISLAMABAD: Pakistan will channel nearly two-thirds of the $2 billion expected annually from a new World Bank partnership into tackling population growth and its impact on children, Finance Minister Muhammad Aurangzeb told UNICEF’s representative during a meeting in Islamabad on Monday.

Earlier this year, Pakistan and the World Bank signed a Country Partnership Framework (CPF) for $20 billion in lending to the cash-strapped nation over the coming decade on development issues like the impact of climate change as well as boosting private-sector growth.

Officials say directing most of the funds to population-related interventions will help relieve strain on education, health care, and food systems, as well as improve long-term human capital outcomes.

“The Finance Minister highlighted the two existential challenges facing the country — climate change and population growth — particularly their impact on child stunting and learning poverty,” the Finance Division said in a statement. 

“He discussed the Country Partnership Framework signed with the World Bank, noting that nearly two-thirds of the USD 2 billion expected every year under the program over the next year would be directed toward addressing population-related challenges.”

Pakistan has one of the highest rates of child stunting in South Asia, while more than three-quarters of children cannot read or understand a simple text by age 10, according to UNICEF. These vulnerabilities are compounded by climate shocks, including devastating floods that have displaced millions and destroyed infrastructure.

Aurangzeb stressed the importance of making the best use of available resources and called for greater coordination among federal and provincial governments, UNICEF, and key ministries to identify priority areas and strengthen technical capacity. He said collaboration with partners such as UNICEF and ministries including Climate Change, Population Welfare, and National Health Services was essential for effective project delivery.

According to the statement, UNICEF Representative Pernille Ironside reaffirmed the agency’s commitment to Pakistan, saying UNICEF is “actively working with relevant ministries and stakeholders across a broad range of sectors, with a particular focus on child care and girls’ education.” 

She said the agency was following “a multi-sectoral approach to community welfare, prioritizing projects in education, health, and climate resilience,” and was exploring ways to further strengthen its role in Pakistan.

Both sides reiterated their resolve to work together to address the challenges facing children and communities and to deepen cooperation for sustainable development.


Pakistan stock market breaches 163,000-mark as mutual fund buying fuels bull run

Pakistan stock market breaches 163,000-mark as mutual fund buying fuels bull run
Updated 29 September 2025

Pakistan stock market breaches 163,000-mark as mutual fund buying fuels bull run

Pakistan stock market breaches 163,000-mark as mutual fund buying fuels bull run
  • The benchmark KSE-100 index rose by 0.98 percent to close at 163,847 points as compared to the weekend close of 162,257 points
  • Data shows mutual funds were hefty net buyers and carried last week’s momentum to Monday’s session, giving the market a solid lift

ISLAMABAD: The Pakistan Stock Exchange (PSX) continued its momentum and gained 1,590 to breach the 163,000-point mark for the first time ever, with market analysts saying aggressive institutional buying was behind the bullish trend.

The benchmark KSE-100 index rose by 0.98 percent to close at 163,847 points as compared to the weekend close of 162,257 points, according to the PSX website.

Maaz Mulla, vice president for equity sales at Karachi-based Topline Securities, said the rally was largely driven by aggressive buying from local mutual funds.

“NCCPL (National Clearing Company of Pakistan Limited) data shows that mutual funds were hefty net buyers on Friday and the momentum carried through to today’s session, giving the market a solid lift,” he said.

The market gained nearly 3,000 points to close the week at an all-time high on Friday as warming United States-Pakistan relations and hopes of an International Monetary Fund (IMF) loan tranche release boosted investor confidence.

Ties have improved between the US and Pakistan as Washington’s relationship with New Delhi has soured over India’s increased purchases of discounted Russian oil amid Ukraine war. President Donald Trump this year raised tariffs on India for those oil purchases, while the US and Pakistan reached a landmark trade deal in July to allow Washington to help develop Pakistan’s largely untapped oil reserves and lower tariffs for Islamabad.

Separately, an IMF mission is currently holding talks with Pakistani officials for the second review of Islamabad’s $7 billion External Fund Facility (EFF) and first review of the $1.4 billion Resilience and Sustainability Facility (RSF) programs.

But despite the positive, the Pakistani stock market slightly slowed down on Monday as compared to the previous session, with volumes recorded at 1,282 million shares and traded value climbing to Rs65.7 billion ($231 million).

“Institutional inflows and improved sentiment ensured the bulls stayed firmly in command, pushing the market higher into new territory,” he said.