Islamabad: The International Monetary Fund (IMF) has indicated that it will closely examine Pakistan’s fiscal response to the recent catastrophic floods that have left a trail of destruction across the country. This announcement comes as part of the IMF’s routine review under the Extended Fund Facility (EFF), aimed at assessing the nation’s budgetary flexibility and effectiveness in disaster management.
According to IMF officials, the upcoming review will focus on the agility of Pakistan’s FY26 budget, with particular attention to allocations made for emergency relief and reconstruction. The evaluation seeks to determine whether the country’s financial planning and resource deployment are sufficient to address both immediate humanitarian needs and long-term recovery efforts.
The recent floods have resulted in tragic loss of life and extensive property damage, particularly in the provinces of Punjab and Sindh. Agricultural lands have been heavily affected, triggering heightened food inflation and compounding economic challenges. The IMF’s review will therefore scrutinize whether Pakistan’s spending on relief operations is adequate and efficiently targeted to mitigate these mounting socio-economic pressures.
Earlier this year, in May, the IMF approved a $1.4 billion loan for Pakistan to strengthen resilience against climate-induced disasters. However, the disbursement of these funds is linked to the successful completion of the EFF reviews. The upcoming assessment will be pivotal in determining the pace and scale of financial support available to Pakistan for flood recovery and rebuilding infrastructure.
As Pakistan continues to grapple with the aftermath of the floods, the IMF’s evaluation is expected to influence policy directions and budgetary strategies, ensuring that critical resources reach affected communities and that fiscal measures remain responsive to future environmental emergencies.