ISLAMABAD—Pakistan has briefed the International Monetary Fund (IMF) review mission on the severe economic impact of recent floods, reporting total estimated losses of Rs371 billion across infrastructure and agriculture. Consequently, the government has projected a downward revision of the real GDP growth target for the current fiscal year (FY26) from the original 4.2% to 3.9% (a 0.3 percentage point reduction).
Economic Losses and Sector Impact
Pakistani officials provided the IMF with a detailed breakdown of the damages and projected production losses:
Key Agricultural Losses:
- Cotton: Production is now projected at 8-8.7 million bales (down 1.5-2 million bales). Losses estimated at Rs 87 billion for major crops.
- Sugarcane: Production may drop by 2.3-4.3 million tons (from 80 million tons).
Human and Infrastructure Damage
The government informed the Fund that the floods resulted in 1,006 deaths and 1,063 injuries, along with widespread destruction of physical assets:
- Roads & Bridges: 2,133 km of roads and 248 bridges were damaged nationwide.
- Housing: 12,569 houses were damaged, with Balochistan reporting the worst destruction (5,086 houses).
- Other Infrastructure: 1,098 educational institutions, 128 health facilities, 100 public buildings, and 3.26 million acres of crop area were affected.
External Financing Strategy
The Ministry of Finance also briefed the IMF on its external financing needs of $26 billion, noting that $12 billion will be rolled over. Officials cited an earlier commitment from China to fulfill all of Pakistan’s rollover and refinancing requirements.
Pakistan also outlined its plans to re-enter the international bond market:
- Panda Bond: Will be launched in the Chinese market in November, targeting $250–$300 million. A second installment is planned for April 2026.
- Eurobond: The launch will be considered in the last quarter (April-June) of FY26, subject to two key conditions:
- Further reduction in the policy rate by the US Federal Reserve.
- Improvement in Pakistan’s risk premium by at least one more notch from international rating agencies.
The Ministry of Finance confirmed that Pakistan repaid the first $500 million of a maturing Eurobond on September 30, 2025, with $1 billion more due by April 2026.
