Pakistan’s Central Bank Receives $1.2 Billion from IMF for Climate Resilience

The Hindu
The Hindu
10h ago • 1 views
Pakistan received $1.2 billion from the IMF to support climate resilience and economic stabilization under ongoing bailout programs.
Pakistan’s Central Bank Receives $1.2 Billion from IMF for Climate Resilience
A What happened
In December 2025, Pakistan's Central Bank obtained $1.2 billion in financial support from the International Monetary Fund as part of combined efforts for long-term climate resilience and economic reform. This funding is a segment of a broader $7 billion IMF bailout package spanning 39 months and includes allocations from both the Extended Fund Facility and the Resilience and Sustainability Facility. Pakistan faces severe impacts from climate and weather-related disasters, including economic losses approximating $29.3 billion over recent decades and the devastating 2022 floods which resulted in significant casualties, displacement, and economic damage. The IMF's assistance focuses on stabilizing Pakistan's macroeconomy and facilitating structural reforms to mitigate climate risks and foster sustainable development amidst fragile economic conditions.
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Key insights

  • 1

    IMF Dual Track Bailout: The IMF provides support to Pakistan through both the Extended Fund Facility and a climate-focused Resilience and Sustainability Facility, signaling a dual approach addressing economic stabilization and climate resilience.

  • 2

    Impact of Climate Disasters: Climate and weather-related disasters have caused significant economic losses in Pakistan, estimated at 11.1% of the country's 2020 GDP, emphasizing the urgent need for climate adaptation funding.

  • 3

    Recent Floods' Effects: The 2022 floods in Pakistan led to 1,700 deaths, displaced 8 million people, increased poverty rates, and caused economic losses equivalent to 4.8% of the FY22 GDP, highlighting the devastating impact of climate events on the nation.

  • 4

    IMF Support Scale: Pakistan is currently engaged in its 24th IMF program, securing $7 billion over 39 months to support both financial stability and redevelopment efforts, indicating consistent international financial collaboration.

Takeaways

The $1.2 billion disbursed by the IMF to Pakistan's Central Bank marks a significant step towards addressing the intertwined challenges of economic instability and climate change impacts in the country. This support underscores the necessity for integrated financial strategies that promote sustainable development and resilience in vulnerable economies facing increasing climate risks.

Topics

Business & Markets Economy Climate & Environment Climate Change Energy