akistan is currently traversing a challenging path, balancing the demands of fiscal stability with the need to address the escalating impacts of climate change. The ongoing discussions with the International Monetary Fund are a critical part of the country’s efforts to stabilise its economy and reinforce its resilience to environmental risks.

An IMF delegation was in Pakistan From November 11 to 15 to review the country’s adherence to the $7 billion 37-month extended fund facility (EFF) programme, which aims to provide the necessary financial support for economic recovery. A significant aspect of these talks was climate resilience, which has become increasingly important as Pakistan faces mounting environmental challenges.

The discussions are centred on Pakistan’s commitment to allocate 1 percent of its GDP annually toward addressing climate change. This is part of a broad strategy to mitigate the environmental impacts of global warming, including more frequent floods, droughts and the accelerated melting of glaciers.

The government is seeking additional concessional loans to support climate adaptation projects, ensuring that Pakistan can enhance its capacity to deal with these challenges while continuing its development efforts. A key point of focus during these talks was allocation of provincial budgets to support these climate-related goals, reinforcing the national commitment to environmental sustainability.

Alongside the climate discussions, the IMF reviewed Pakistan’s economic performance under the EFF. This programme aims at stabilising the country’s economy by addressing immediate fiscal challenges. Currently, Pakistan faces a revenue shortfall of $685 million, which has contributed to a rising fiscal deficit. The IMF highlighted how Pakistan could bridge these gaps and stabilise its finances. An additional concern was the external financing needs of $2.5 billion for the current fiscal year.

One of the central topics is the pathetic situation of state-owned enterprises (SOEs), particularly the failed privatisation of the national airline and the........

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