IMF Pledges Support to Pakistan Amid Flood Crisis: PM

Prime Minister Shehbaz Sharif announced Thursday that the International Monetary Fund (IMF) has pledged its support to Pakistan as the country grapples with the aftermath of devastating floods. The assurance came during a high-level ceremony where the Government of Pakistan and a consortium of 18 banks signed agreements for a landmark Rs. 1.225 trillion financing facility to address the country’s chronic power sector circular debt. Speaking virtually from New York, where he is attending the 80th United Nations General Assembly session, the prime minister shared details of his recent meeting with IMF Managing Director Kristalina Georgieva. “She lauded Pakistan’s economic reforms and, recognizing the impact of the floods, was gracious in offering us significant space, saying the IMF stands ready to move forward together with us,” Sharif said. The meeting, held on the sidelines of the UNGA, focused on Pakistan’s ongoing economic reforms and the need for the IMF to factor in the economic fallout from the recent floods during its upcoming review. An IMF team is scheduled to visit Pakistan on September 25, 2025, for the second semi-annual review of the Extended Fund Facility (EFF), at a time when the country faces mounting food inflation and economic hardship due to the floods. Addressing the financing agreement ceremony, Prime Minister Sharif described the resolution of the circular debt as a “major achievement,” noting that the issue had long consumed national resources and threatened the stability of the energy sector. He credited the Power Task Force for its diligent work and successful negotiations with independent power producers, emphasizing that the new circular debt plan is the result of collective effort. Federal Minister for Energy Awais Leghari, also speaking at the event, highlighted the heavy toll the circular debt has taken on the economy and the energy sector. He stressed that the resolution plan is not an isolated measure but part of a broader government reform agenda. “This initiative will strengthen the liquidity position of the power sector and send strong signals of fiscal discipline, investor confidence, and reform commitment,” Leghari said, adding that the plan aims to eliminate the circular debt within six years. Federal Minister for Finance and Revenue Senator Muhammad Aurangzeb, addressing the ceremony virtually, described the agreement as the largest financing and restructuring transaction in Pakistan’s history. “This is a win-win situation,” he remarked, noting that the government is now addressing the structural issues that have long plagued the power sector.