A RECENT article by Nathan Porter, IMF’s Pakistan mission chief, on ‘Revitalising Pakistan’s economy’ in Dawn provided a comprehensive overview of the key considerations and decisions vis-à-vis the Extended Fund Facility (EFF) that will guide our economic reform challenges up to October 2027. However, a crucial element was overlooked — climate change.

Pakistan cannot afford to delay climate action any longer. The absence of any mention of climate risks highlights a significant gap in the Fund’s approach to Pakistan’s economic turnaround. This oversight is particularly of concern since our fiscal policy is not designed to support climate resilience and mitigation efforts while pursuing macroeconomic stability.

Despite the success of the recent Stand-by Agreement (SBA), we still grapple with resource scarcity, which makes it challenging to address development and climate resilience. We have thus far not integrated climate considerations into budgetary processes, revenue generation, and expenditure management.

The article rightly mentions that Pakistan faces significant fiscal constraints, including high public debt, budget deficits, and limited revenue collection — constraints that limit our ability to allocate resources for climate adaptation and mitigation.

Pakistan needs to implement reforms that balance economic growth with climate resilience.

Given its high vulnerability to climate disasters, Pakistan faces further straining of its fiscal resources. The floods of 2022 vividly illustrated this vulnerability, affecting over 33 million people and causing damage estimated at $30 billion, equivalent to nearly 10pc of GDP. This single event underscores the magnitude of climate-related fiscal risks.........

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