Finance minister indicates Pakistan will engage IMF management board on climate financing
\n Islamabad
\nMinister for Finance and Revenue Senator Muhammad Aurangzeb has said that he is confident that the International Monetary Fund\u2019s (IMF) Board of Directors will approve the staff-level agreement by the end of August.
\nAddressing the \u201cClimate Action for Pakistan\u201d event organised by Acumen Pakistan on Tuesday, the finance czar also indicated that there would be discussions with the IMF management board regarding climate financing.
\nLast month, Pakistan and the IMF reached an agreement for a $7 billion, 37-month loan agreement with tough measures such as raising tax on farm income. The staff-level agreement capped negotiations that started in May after Islamabad completed a short-term, $3 billion programme that helped stabilize the economy, avert a sovereign debt default and set challenging revenue targets in its budget to get IMF approval.
\nTouching on the macroeconomic situation, Aurangzeb also assured that Pakistan\u2019s \u201ceconomy is on a path to stability\u201d, with ongoing reforms aimed at fostering sustainable economic growth and development.
\nPakistan has been struggling with boom-and-bust cycles for decades, leading to 22 IMF bailouts since 1958. Currently, the IMF is the fifth-largest debtor, owing $6.28 billion as of July 11, according to the lender\u2019s data.
\nThe federal finance emphasised the need for expanding the tax system, improving transparency, implementing energy sector reforms and enhancing governance.
\nUnder the IMF deal, the highest effective tax rate can rise to as much as 45% from the current 15%. It will be implemented from 2025, a move that was termed \u201cunprecedented\u201d by analysts.
\nThey added that these changes could contribute to inflation, particularly in food prices, affecting consumers nationwide, adding that larger farmers would be affected more. Inflation averaged close to 30% in FY23 and 23.4% in FY24, which ended on June 30.
\n\u201cThe current government is taking necessary measures in these areas,\u201d he noted adding, \u201cPakistan requires increased resources to accommodate its growing population.\u201d
\nStressing the need for effective projects to address climate change challenges, and advocating for active participation and financing from the private sector, he highlighted that climate change was an international issue impacting many regions globally.
\nHe noted that Pakistan was among the countries most affected by climate change and in 2022 floods, it suffered massive destruction and incurred losses estimated at $30 billion.
\nAurangzeb mentioned that at the Geneva conference, various countries, bilateral and multilateral partners, and international organisations pledged over $9 billion in assistance for Pakistan. However, the country did not receive the promised funds.
\nHighlighting its crucial role in climate financing, the finance minister urged the private sector to assume leadership in this area.
\nPakistan has lost nearly 10,000 lives and has suffered economic losses worth $3.8 billion due to climate change from 1998 to 2018, while the floods in 2022 further cost life, infrastructure and economic losses of over $30 billion and reconstruction needs over $16 billion.<\/p>\n","protected":false},"excerpt":{"rendered":"
Finance minister indicates Pakistan will engage IMF management board on climate financing Islamabad Minister for Finance and Revenue Senator Muhammad Aurangzeb has said that he is confident that the International Monetary Fund\u2019s (IMF) Board of Directors will approve the staff-level agreement by the end of August. Addressing the \u201cClimate Action for Pakistan\u201d event organised by […]<\/p>\n","protected":false},"author":2,"featured_media":421651,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[],"class_list":{"0":"post-423321","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-business"},"yoast_head":"\n