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The IMF defended its $1 billion bailout to Pakistan, stating the country met required targets despite India’s concerns over terrorism. The aid is tied to 11 new conditions, including budget approvals and financial strategy planning.
New Delhi:
The International Monetary Fund (IMF) has defended the $1 billion (over Rs 8,000 crore) bailout package to Pakistan, saying the debt-ridden country “met all the required targets” to receive the latest loan instalment. The IMF released the funding when Pakistan was busy with arbitrary firing on India after the Indian military launched Operation Sindoor – a military strike on terror infrastructure in Pakistan and Pakistan-Occupied Kashmir (PoK).
The IMF’s justification comes days after India asked it to reconsider its $2.1 billion bailout to Pakistan as it allows terrorists to use its soil for launching state-sponsored attacks against Indian citizens. Defence Minister Rajnath Singh last week said that the aid to Pakistan is a “form of indirect funding to terror”.
The IMF disbursed $2.1 billion to Pakistan in two tranches under its Extended Fund Facility (EFF) programme. The global lender and Pakistan last year signed a deal for $7 billion under the EFF.
Defending its loan, IMF’s director of the communications department, Julie Kozack, said, “Our Board found that Pakistan had indeed met all of the targets. It had made progress on some of the reforms, and for that reason, the Board went ahead and approved the program.”
“The first review was planned for the first quarter of 2025. And consistent with that timeline, on March 25 of 2025, the IMF staff and the Pakistani authorities reached a staff-level agreement on the first review for the EFF. That agreement, that staff-level agreement, was then presented to our Executive Board, which completed the review on May 9. As a result, Pakistan received the disbursement at that time,” she explained further during a media briefing.
Ms Kozack also addressed the conflict between India and Pakistan and hoped for a peaceful resolution between the two countries.
“With respect to Pakistan and the conflict with India, I want to start here by first expressing our regrets and sympathies for the loss of life and for the human toll from the recent conflict. We do hope for a peaceful resolution of the conflict,” she said.
IMF’s 11 conditions to Pakistan
Last week, the global monetary fund slapped 11 new conditions on Pakistan for the release of the next tranche of its bailout program and reportedly warned that tensions with India could heighten risks to the scheme’s fiscal, external, and reform goals. According to a report, the new conditions include the parliamentary approval of a new Rs 17.6 trillion budget, an increase in the debt servicing surcharge on electricity bills, and lifting restrictions on the import of more than three-year-old used cars, among others.
Another condition states that the government will prepare and publish a plan outlining the government’s post-2027 financial sector strategy, outlining the institutional and regulatory environment from 2028 onwards. Parliament will also adopt legislation to make the captive power levy ordinance permanent by the end of this month, the IMF said.
The IMF has also imposed a condition that Pakistan will prepare a plan based on the assessment conducted to fully phase out all incentives in relation to Special Technology Zones and other industrial parks and zones by 2035.
