Pakistan is in the final stages of IMF negotiations, with no major obstacles in sight, according to Finance Minister Muhammad Aurangzeb. He assured that the country is on track to meet the IMF’s financial targets, paving the way for the next tranche of funding. However, he also warned that climate change poses a serious threat to economic stability, urging immediate action to address environmental risks.
IMF Talks Progressing Smoothly
Speaking to journalists, Aurangzeb expressed optimism about Pakistan’s ongoing discussions with the IMF. He emphasized that the country is committed to economic discipline and structural reforms, which will help secure the next phase of the $7 billion loan program.
Pakistan and the IMF have made significant progress toward a Staff-Level Agreement (SLA). The IMF Mission Chief to Pakistan, Nathan Porter, recently confirmed that talks have been productive. If the IMF approves the first review, Pakistan is expected to receive $1 billion as the second installment.
The latest IMF program, secured under Prime Minister Shehbaz Sharif’s administration, has been crucial in stabilizing the economy. The finance minister reaffirmed that fiscal responsibility remains a top priority and that Pakistan is taking necessary steps to ensure long-term economic recovery.
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Climate Change: A Growing Economic Threat
While discussing economic matters, Aurangzeb also highlighted the devastating impact of climate change on Pakistan. He pointed out the rapid melting of glaciers, worsening air pollution, and unpredictable weather patterns, all of which threaten economic stability.
“Environmental shifts are not just an ecological crisis; they are a financial burden,” he stated. The government has been in talks with the IMF and other global lenders to develop a structured climate financing system.
$10 Billion Pledged for Flood Rehabilitation
Aurangzeb revealed that international donors have pledged $10 billion for flood rehabilitation projects. However, Pakistan has struggled to present effective implementation plans, delaying the release of funds. He stressed the need for practical and actionable climate initiatives to fully utilize this assistance.
The minister also acknowledged that rising pollution levels and deforestation are worsening environmental degradation. He assured that the finance ministry is working closely with the climate change ministry to combat these challenges.
Water Crisis and Population Growth
Aurangzeb warned that Pakistan’s water resources are under severe stress. The disruption of the natural water cycle and insufficient winter rainfall signal a worsening crisis. He identified population growth and climate change as the two biggest threats to Pakistan’s future.
The government has been working with the World Bank to improve climate resilience. Aurangzeb highlighted research efforts by the Everest K2 Research Centre, which is studying glacial melt patterns and their impact on water availability.
Urgent Action Needed
The finance minister urged policymakers to speed up project timelines and implement sustainable solutions. He stressed that failure to address climate risks could have devastating economic consequences.
Pakistan’s path to financial stability depends not only on securing IMF support but also on tackling the climate crisis before it spirals out of control.
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