Pakistan floods
Victims of the unprecedented flooding from monsoon rains receive relief aid in Sukkur, Pakistan, in a file photo. Image Credit: AP file

ISLAMABAD: Pakistan’s timely finalisation of a recovery plan from devastating floods is essential to support discussions and continued financial support from multilateral and bilateral partners, the International Monetary Fund (IMF) said on Wednesday.

Pakistan was already battling a full-blown economic crisis, with decades-high inflation and dwindling foreign exchange reserves, when it was hit by floods earlier this year. It had entered a $6 billion IMF bailout programme in 2019, and the ninth review is currently pending.

“The timely finalisation of the recovery plan is essential to support the discussions, along with continuing financial support from multilateral and bilateral partners,” IMF resident representative Esther Perez Ruiz said in a message to Reuters.

She added that IMF staff is continuing discussions with Pakistani authorities over policies to reprioritise and better target support toward humanitarian needs, while accelerating reform efforts to preserve economic and fiscal sustainability.

Devastating floods killed more than 1,700 people and inflicted billions of dollars of damage. Pakistani authorities’ estimates of the damage have varied from $10 billion to $40 billion.

Pakistan’s finance ministry said last week that it would “expeditiously” finish technical engagement with the IMF as part of the ninth review of the programme, but a firm date for the review completion is yet to be announced.

The funds will be a lifeline for the South Asian nation, which is struggling to convince international markets and ratings agencies that it has the funds to meet external financing requirements, including debt repayments.

Pakistan has a $1 billion international bond repayment due early next month. Its total foreign reserves with the central bank stood at $7.9 billion as of last week.