Shehbaz Presses IMF Chief on Flood Damage and Fuel Subsidy at UNGA Sideline Meeting

Prime Minister Shehbaz Sharif met IMF Managing Director Kristalina Georgieva on the sidelines of the 81st UN General Assembly in New York on September 23, 2026, using the meeting to press two points directly with the Fund's chief: that recent flood damage should weigh on the ongoing programme review, and that the government's Rs100-per-litre fuel subsidy scheme should not be treated as a compliance problem.

What the Prime Minister raised

Shehbaz told Georgieva that the devastation caused by this year's floods must be reflected in the IMF's review of Pakistan's $7 billion Extended Fund Facility (EFF), according to statements from the meeting. Georgieva responded that she was sympathetic to the flood-affected population and said damage assessment would be "critical to underpin recovery priorities" — a response that stops short of a commitment but signals the Fund is open to weighing flood costs into its calculations.

On the fuel relief scheme — which gives motorcycle, rickshaw, and small-car owners Rs100 off every litre of petrol, covered in detail separately — the Prime Minister said the IMF had not raised serious concerns after he explained the pressure facing low-income households. He also told Georgieva that Pakistan is meeting all seven conditions under the EFF, a more optimistic framing than the "six of seven confirmed, one pending" status reported when the formal review talks opened in Karachi on September 23 — the outstanding item being the count of new tax returns from first-time filers.

Two tracks, one review

This UNGA meeting sits alongside, not instead of, the technical-level review that IMF staff are conducting with State Bank of Pakistan officials in Karachi. The Georgieva meeting is a leadership-level conversation about the politics and framing of the review — flood damage, subsidy optics — while the Karachi talks are where the actual quantitative performance criteria get checked against Pakistan's numbers. Georgieva's own public remarks described Pakistan's reform implementation as having "helped preserve economic stability, restore confidence and regain market access," language consistent with the credit-rating upgrades Pakistan received from S&P and Moody's earlier this year.

Why the subsidy question matters

IMF programmes typically discourage broad, untargeted subsidies because they distort markets and strain the budget — which is why the government has been careful to describe the Rs100 scheme as targeted at specific vehicle categories (motorcycles, rickshaws, and 800cc-and-under cars) rather than universal. Whether the Fund's staff-level review in Karachi treats the scheme the same way the Prime Minister described it in New York is the detail worth watching once that review concludes.

What happens next

The fourth EFF review and third Resilience and Sustainability Facility review were expected to wrap up around September 25, 2026. A successful outcome triggers release of the next loan tranche and functions as a signal to other lenders and markets about Pakistan's programme compliance — the same dynamic that shapes how Pakistan's reserves and rupee are covered on this site.

Build Better Pakistan's Economy Desk is tracking the IMF review and will update this piece once the Fund issues its findings.