Pakistan-IMF Talks entered a crucial stage this week as officials briefed the mission on growth, inflation, remittances, and flood-related challenges. The review is part of the second half-yearly economic assessment under the ongoing IMF programme.
According to officials, Pakistan’s growth rate is expected to remain between 3.7% and 4%, slightly lower than the 4.2% target set in the federal budget. Inflation for the fiscal year is projected at 7%, while September’s inflation is forecast between 3.5% and 4.5%. Authorities, however, warned that flood losses could gradually push prices upward.
During Pakistan-IMF Talks, provincial governments also presented their reports. Punjab cited heavy flood damages as the reason for withholding its budget surplus. The province announced it would use its own resources for relief and rehabilitation efforts. An official damage report is being prepared, while Sindh estimated losses of Rs50 billion and Khyber Pakhtunkhwa reported Rs30 billion. Balochistan, however, noted negligible damages.
The IMF has requested Pakistan to submit a consolidated damage report soon. Under the fiscal framework, provinces are required to contribute a surplus of Rs1,464 billion, but last year the target fell short by Rs280 billion. This year’s commitment remains under question due to disaster-related spending.
On the external side, officials highlighted that remittances may reach a record $43 billion, well above the $39.4 billion target. A large share of inflows is expected from overseas Pakistanis supporting flood-hit areas, particularly in Punjab and Khyber Pakhtunkhwa.
Meanwhile, the current account deficit is projected at $1 billion, much lower than the $2.1 billion target. Exports are expected to reach $34.2 billion compared to the $35.2 billion target, while imports may total $65 billion.
Analysts say Pakistan-IMF Talks will remain focused on fiscal discipline, provincial surpluses, and the economic impact of floods. The outcome will play a vital role in shaping the next phase of IMF support.
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