The International Monetary Fund (IMF) defended its recent decision to release a $1 billion loan to Pakistan. The IMF said Pakistan has fulfilled all the necessary conditions to receive the money. This amount is part of a larger support program aimed at helping the country manage its economic crisis. The bailout is part of the Extended Fund Facility (EFF), which was approved in September 2024. So far, Pakistan has received a total of $2.1 billion under this program.
IMF Responds to Criticism
Julie Kozack, the IMF’s communications director, spoke at a press briefing to clarify the fund’s decision. She 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.” She added, “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.”
'Pakistan cannot use IMF bailout funds to support its govt budget. Any deviation from these conditions will impact the PAK bailout program," says IMF pic.twitter.com/mLvzHWIzwx
— Shashank Mattoo (@MattooShashank) May 23, 2025
IMF Sets New Conditions for Pakistan
As tensions with India grow, the IMF has added 11 new conditions for Pakistan to follow in exchange for the loan. According to reports, these include getting parliamentary approval, raising debt-related electricity surcharges, and removing restrictions on imports.
India Strongly Protests the Bailout
India has protested the IMF’s decision, saying the money could be used to support cross-border terrorism. Defence Minister Rajnath Singh said the aid was a “form of indirect funding to terror.”
On May 9, just a day before the ceasefire with Pakistan, India criticized the IMF for approving the bailout. In an official statement, India said, “In the 35 years since 1989, Pakistan has had disbursements from the IMF in 28 years. In the last 5 years since 2019, there have been 4 IMF programs. Had the previous programs succeeded in putting in place a sound macro-economic policy environment, Pakistan would not have approached the Fund for yet another bail-out program.” Despite India’s objections and its decision to abstain from the vote, the IMF board approved the bailout package.
