IMF Defends \$1 Billion Bailout to Pakistan Despite India’s Objection: ‘All Targets Met’

The International Monetary Fund (IMF) has defended its decision to release a \$1 billion bailout to Pakistan, despite strong objections from India. In an official statement, the IMF confirmed that Pakistan had “met all the required targets” under the terms of its support program, and therefore qualified for the latest instalment.

In September 2024, the funding is part of the Extended Fund Facility (EFF) program approved, through which Pakistan has so far received around \$2.1 billion to help stabilize its struggling economy.

At a recent press briefing, IMF Communications Director Julie Kozack explained the reasoning behind the decision. “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 said.

Kozack added that Pakistan and the IMF had reached a staff-level agreement on March 25, 2025, following the first review of the EFF. This agreement was then presented to the IMF’s Executive Board, which completed its review on May 9, leading to the disbursement of the latest loan.

Amid rising tensions with India, the IMF reportedly imposed 11 new conditions on Pakistan in exchange for the funds. These include securing parliamentary approval, increasing the debt servicing surcharge on electricity, and lifting restrictions on imports, among others.

Defence Minister Rajnath Singh accused the IMF of indirectly financing terrorism, warning that the funds could be misused for cross-border attacks. India has strongly protested the IMF's decision. On May 9, just one day before a ceasefire agreement between India and Pakistan, New Delhi publicly criticized the IMF’s decision, urging the Fund to reconsider.

In its official statement, the Indian government highlighted Pakistan’s repeated reliance on IMF bailouts, noting that the country has received IMF support in 28 of the last 35 years. “If previous programs had succeeded in establishing a stable economic framework, Pakistan wouldn’t need yet another bailout,” the statement read.

Despite India’s objections and its decision to abstain from voting, the IMF went ahead and approved the disbursement.