ISLAMABAD: Pakistan has informed IMF about economic losses of Rs371 billion caused to infrastructure and agriculture sectors by recent floods, projecting a downward revision in GDP growth target with a margin of 0.3 percent.
The government has envisaged a real GDP growth target of 4.2pc on the eve of budget with approval of National Economic Council (NEC) and Parliament for current fiscal year, which has now been projected to revise downward to 3.9pc for FY26.
Ministry of Finance high-ups briefed IMF review mission about external financing needs of $26 billion, out of which $12 billion will be rolled over, citing the example China’s Ambassador gave commitment before IMF last time that all rollover and refinancing requirements of Pakistan would be fulfilled within stipulated timeframe.
The IMF has also been apprised Islamabad will reappear on the radar screen of international bond market during current fiscal year. It may prefer to launch Eurobond in the last quarter (April-June) 2026 with two pre-requisite conditions, including a further reduction in policy rate by Fed Reserve in US. Secondly, Pakistan’s risk premium recedes with improvement of one more notch from international rating agencies. On macroeconomic modelling and flood damages, Pakistani high-ups informed the Fund review mission recent floods caused 1,006 deaths, 1,063 injuries and 12,569 house damages. The floods also caused damage to 2,133 kilometers of roads, 248 bridges and water infrastructure of 866 in all over the country. The floods damaged infrastructure as 1,098 educational institutions, 128 health facilities and 3.26 million acres of crop area were affected. The floods also caused damage to 100 public sector buildings, 8 mines, 1,291 commercial areas/shops and 10,991 livestock across the country. The break-up of losses incurred in provinces shows out of 1,006 deaths, 504 occurred in KPK, 304 in Punjab, 80 in Sindh, 41 in GB, 38 in AJK, 30 in Balochistan and 9 in Islamabad Capital Territory (ICT).
The province-wise household damages showed Balochistan witnessed worst destruction as 5,086 houses were damaged, followed by KPK with 3,222, AJK 2,017, GB 1260, Punjab 238, Sindh 281 and ICT 65. For road infrastructure, floods caused damage to 1,216km in Punjab, 437km in KP, 201km in AJK, 99km in Balochistan, 20 km in GB, 7km in Sindh, and 0.03km in ICT. The floods damaged 94 bridges in AJK, 87 in GB, 52 in KP and 3 in Balochistan and ICT each. There is no data on bridge damage for Punjab and Sindh. For livestock sector, 5,467 livestock in KP, 380 in Balochistan, 239 in AJK, 235 in Sindh, 121 in Punjab and 67 in GB.
The production losses of important crops show cotton production is estimated to face a loss of 1.5 to 2 million bales. Before the floods cotton production was estimated at 10.2 million bales, but now production may stand at 8 to 8.7 million bales in FY26. The production has been estimated at 9.5 million tons. But after the floods, its production is estimated to face losses of 0.7 million to 1.3 million tons and might stand at 8.2 to 8.8 million tons. The sugarcane production will also be damaged to the tune of 2.3 to 4.3 million tons, as it might reduce from 80 million tons to 76 or 78 million tons. Production of maize will also be damaged by 0.5 to 1.3 million tons.
In totality, the agriculture sector growth, which is envisaged at 4.5pc for the current fiscal year, might be slashed down to 4pc in the wake of recent floods. The agriculture sector faced losses of Rs155 billion. For important crops, growth is projected to reduce from 6.7pc to 4.5pc. The losses of important crops are estimated at Rs 87 billion.
The industrial sector growth has been estimated to face a reduction from 4.3pc to 4.2pc for the current fiscal year. The electricity, gas and water supply faced losses, so its growth is estimated to reduce from 3.5 to 2.9pc for FY26.
The services sector growth, which was envisaged at 4pc, has now been estimated to stand at 3.7pc in the aftermath of floods. The flood has impacted electricity, gas and water supply by 0.6pc, major crops by 2.2pc, housing by 0.4pc, infrastructure by 1.74pc, agriculture growth by 0.5pc, industry by 0.1pc and services by 0.3pc for FY26.
The total accumulated losses are estimated at Rs371 billion to Pakistan’s economy in the wake of recent floods.
Regarding issue of launching Eurobonds, Ministry of Finance informed IMF the Panda bond would be launched in November with a target of $250 to $300 million in the Chinese market, followed by a second installment in April 2026.
The launch of Eurobond will be considered in the last quarter of FY26. It has not yet been decided on the exact size of upcoming Eurobond. Pakistan had to repay $1.5 billion on account of maturity of Eurobond. The first $500 million was repaid on September 30, 2025, and then $1 billion by April 2026.
On the external front, IMF was told the SBP purchased over $500 million in June 2025 from interbank market. The total purchases from the market hovered around $7.7 billion in a bid to build up foreign exchange reserves.
The recent floods affected 52 districts of the country. The floods hit 6.5 million people and displaced around 2.5 million. The food security is also at risk. Muhammad Saleh Zaafir adds: Expressing satisfaction about trajectory of engagement with visiting IMF delegation, Federal Finance and Revenue Minister Muhammad Aurangzeb has said government is hectically busy with making damage assessment of recent floods that would be submitted to IMF for seeking further relief adjustments.
In an exclusive chat with The News here, federal minister reminded government hasn’t made up its mind to impose any flood taxation. The ultimate decision would be taken in the light of damage assessment that is being carried out on national scale. “Our resilience would work to overcome complexities on account of huge losses”, he said.
The delegation has reportedly expressed satisfaction about various steps taken by the federal government for streamlining the economy. To a query Minister Aurangzeb said high level delegation and experts would visit Pakistan from United States companies for furtherance of work on rare earth and mineral explorations.