IMF Urges Pakistan to Invest in Climate Resilience

The IMF advises Pakistan to invest 1% of its GDP in climate resilience and adaptation reforms to mitigate severe weather impacts like floods. Proactive efforts could enhance growth, reduce inequality and public debt, and protect against economic losses from natural disasters, boosting long-term sustainability.

The International Monetary Fund (IMF) has called on Pakistan to allocate one percent of its GDP annually for climate resilience and adaptation measures. This investment, valued at over Rs 1.24 trillion, aims to prepare the nation for recurring extreme weather events such as floods, according to recent media reports.

The IMF's policy advisory highlighted that ongoing reforms under the Extended Fund Facility (EFF) could potentially elevate Pakistan's growth by 2 percent over five years while tackling inequality. Additionally, investment in climate-adaptive infrastructure may significantly mitigate the economic impact of natural disaster shocks.

The advisory notes that improved public investment efficiency and additional borrowing could further strengthen Pakistan's resilience against climate shocks. Discussions are set to continue at upcoming IMF and World Bank meetings, focusing on the potential USD 2 billion financing request under Pakistan's climate resilience initiative.