Pakistan seeks additional $2 billion from IMF to combat climate change
Pakistan is seeking an additional USD 2 billion from the International Monetary Fund (IMF) to mitigate the severe impacts of climate change, according to ARY News. Finance Minister Muhammad Aurangzeb will lead the delegation during the IMF and World Bank Group’s Annual Meetings in Washington, DC, from October 21-26. The IMF has previously expressed concerns over Pakistan’s external debt and fragile repayment capacity.
Pakistan is seeking an additional USD 2 billion from the International Monetary Fund (IMF) to address the severe impacts of climate change, according to a report by ARY News.
Finance Minister Muhammad Aurangzeb plans to make this request during the upcoming IMF meetings later this month, as cited by the news outlet.
The IMF and World Bank Group’s 2024 Annual Meetings are set to take place from October 21 to October 26 in Washington, DC, with the main ministerial sessions occurring between October 22 and 25.
Aurangzeb will head a delegation that includes the finance secretary, economic affairs secretary, governor of the State Bank of Pakistan, and other key financial officials.
Previously, the IMF expressed concerns about Pakistan’s ability to manage its external debt, describing the situation as “fragile,” as reported by Geo News.
The IMF projects that Pakistan’s external financing needs will total USD 62.6 billion over the next three years under the Extended Fund Facility (EFF) program. This figure is expected to rise to USD 110.5 billion over the five-year period from 2024-2025 to 2028-2029.
For the current fiscal year, Pakistan’s external funding needs are estimated at USD 18.813 billion, increasing to USD 20.088 billion in 2025-2026 and USD 23.714 billion in 2026-2027. Even after the three-year program concludes, financial demands will remain substantial, requiring USD 24.625 billion in 2027-2028 and USD 23.235 billion in 2028-2029.
The IMF has warned that Pakistan’s debt repayment capacity is under “major risks” and heavily depends on effective policy implementation and timely external financing.
Should the request be approved, the Fund’s exposure would rise to Special Drawing Rights (SDR) 6,816 million (336 percent of quota) by September 2024.
The IMF noted that “exceptionally high risks,” including elevated public debt, significant financing needs, low reserves, and sociopolitical factors, could undermine policy implementation and impact debt sustainability.
On September 25, the IMF’s Executive Board approved a 37-month Extended Fund Facility (EFF) agreement for Pakistan, valued at approximately USD 7 billion.
Source Link : https://bioenergytimes.com/pakistan-seeks-additional-2-billion-from-imf-to-combat-climate-change/
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