Senior officials from the Ministry of Finance have briefed the International Monetary Fund (IMF) review mission on the economic losses caused by the recent floods, which are estimated at Rs 371 billion. They also informed the mission that Pakistan requires $26 billion in external financing for the fiscal year 2025-26.
The officials detailed that due to the devastation caused by the recent floods, the government has revised its Gross Domestic Product (GDP) growth target downwards from 4.2% to 3.9%.
The growth target for the agriculture sector has been reduced from 4.5% to 4%. Significant production shortfalls are anticipated in key crops such as cotton, rice, sugarcane, and maize, which are expected to result in a loss of approximately Rs 155 billion.
Furthermore, the growth target for the industrial sector is likely to decrease from 4.3% to 4.2%, and the services sector target is being lowered from 4% to 3.7%.
The IMF was informed that out of the $26 billion in external financing, $12 billion will be rolled over. Officials highlighted China’s assurance to meet the country’s rollover and refinancing requirements.
According to the Ministry of Finance, the government intends to issue a Panda Bond of $250 million to $300 million in the Chinese market in November.
Pakistan will also consider issuing Eurobond in the last quarter of the fiscal year 2026 (April-June 2026). This decision will be contingent on a cut in the US Federal Reserve’s policy rate and an improvement in Pakistan’s risk premium by international rating agencies. The government is also due to repay a $1 billion Eurobond by April 2026.
The recent floods have resulted in significant loss of life and property across the country. The human toll includes 1,006 deaths and 1,063 injuries. Additionally, 12,569 houses were damaged, while 2,133 kilometres of roads and 248 bridges were affected. A total of 3.26 million acres of crops were destroyed. The Finance Minister also reiterated the government’s intention not to impose a flood tax.
