IMF defends $1 billion bailout package to Pakistan
What's the story
The International Monetary Fund (IMF) has defended its recent $1 billion bailout package for Pakistan, saying the country met all necessary targets for disbursement.
The funding was released under the Extended Fund Facility (EFF) program approved in September 2024. Pakistan has received $2.1 billion through this program.
Julie Kozack, Director of the IMF's Communications Department, confirmed that "our Board found that Pakistan had indeed met all of the targets."
Fund usage
IMF outlines fund allocation and structural reforms
Kozack clarified that the IMF financing is meant to tackle balance of payments issues only.
She said all EFF disbursements go directly into Pakistan's central bank reserves with a "zero limit on lending from the central bank to the government."
The program also includes structural reforms aimed at improving Pakistan's fiscal management.
New conditions
IMF imposes new conditions, warns of enterprise risks
As part of its bailout program, the IMF has also imposed 11 new structural benchmarks on Pakistan.
These include securing parliamentary approval for a ₹17.6 trillion budget for FY26 by June-end and raising the debt servicing surcharge on electricity bills.
The global lender has warned that "enterprise risks have increased" due to rising tensions with India, which could impact fiscal, external and reform goals of the program.
India's stance
India abstains from voting, raises concerns over IMF's role
India had earlier abstained from voting in the IMF Board meeting due to concerns over Pakistan's "poor track record" and possible misuse of funds for state-sponsored terrorism.
Defense Minister Rajnath Singh had called the aid a "form of indirect funding to terror."
"India would like the IMF to reconsider its assistance...and refrain from giving any kind of assistance in future," Singh said.
The 37-month EFF, approved in September 2024, provides for a total disbursement of $7 billion to Pakistan.