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Despite India's protest, IMF justifies $1 billion bailout to Pakistan: ‘Met all required targets’
Amid the tensions between India and New Delhi's formal protest, the IMF has justified its bailout to Pakistan.
The International Monetary Fund (IMF) has justified its $1 billion bailout to Pakistan, despite recent objections from India. According to the official statement issued by the IMF, Pakistan has “met all the required targets” to receive the latest loan instalment.
This latest bailout to Pakistan comes as part of the support package extended to the debt-ridden country. Under the Extended Fund Facility programme, which was approved in September 2024, Pakistan has received around $2.1 billion.
IMF defends loan to Pakistan
Speaking at a press briefing, IMF's director of the communications department, Julie Kozack justified the loan to Pakistan and stated that the country has met all its targets.
"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," Kozack told reporters.
"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 added further.
Amid the tensions with India, the IMF gave Pakistan 11 new conditions in order to receive the loan. As per reports, these conditions included parliamentary approval, increase in debt servicing surcharge in electricity, lifting restrictions on imports and more.
India lodges protest over bailout
Last week, India once again asked the IMF to reconsider its bailout package to Pakistan, citing the use of the money to fund cross border terrorism.
Defence minister Rajnath Singh added that the IMF aid to Pakistan was a "form of indirect funding to terror".
On May 9, a day before the ceasefire between India and Pakistan, New Delhi slammed the IMF for its bailout package for Pakistan, citing misuse of the funds for terrorism.
"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," read the official statement issued by the Indian government.
Despite India abstaining from the vote and lodging protest, the bailout package was cleared.
