International Monetary Fund readies to progress with Pakistan's evaluation in spite of India's protests.
The IMF's Bailout Discussion with Pakistan Remains Unaltered
Mark your calendars, folks! The International Monetary Fund (IMF) has confirmed that the Executive Board meeting regarding Pakistan's bailout program will be happening as planned on May 9, 2025.
Mahir Binici, the IMF's Resident Representative for Pakistan, made this announcement in a statement to Business Recorder. He stated that the Executive Board meeting for the first EFF (Extended Fund Facility) review and RSF (Resilience and Sustainable Facility) request is set to go ahead without any changes.
Yesterday, a Reuters report circulated, claiming that India had asked the IMF to review loans given to Pakistan due to escalating tensions between the South Asian neighbors following a deadly attack in the Indian Illegally Occupied Jammu and Kashmir (IIOJK).
The ongoing feud between India and Pakistan has seen a series of measures taken after an attack on tourists in the IIOJK last week that left 26 men dead. There are fears that this latest crisis between the nuclear-armed rivals could lead to a military conflict.
Islamabad has denied any involvement and called for a neutral investigation. India has suspended a critical river water sharing treaty, and the two countries have closed their airspace to each other's airlines.
The IMF board will convene on May 9 to discuss the first review of the ongoing $7 billion bailout program and a new $1.3 billion arrangement under a climate resilience loan program.
Last month, the IMF's staff sealed a deal with Pakistan for a new $1.3 billion arrangement and also agreed on the first review of the ongoing 37-month bailout program.
Should the IMF's Executive Board give its approval, Islamabad can access the $1.3 billion under a new climate resilience loan program spanning 28 months. This would free up $1 billion for Pakistan under the $7 billion bailout program, bringing the disbursements to $2 billion.
The bailout program is crucial for Pakistan's $350 billion economy, and Pakistan has claimed that it has managed to stabilize under the bailout, helping it ward off a default threat.
The overall status of Pakistan's $7 billion IMF bailout program, approved in September 2024, remains "completely on track." The government reports smooth review progress amid India's alleged efforts to pressurize the IMF for loan reevaluation following the April 22 Pahalgam attack, which Islamabad dismisses as politically motivated.
In addition to the bailout program, a $1.3 billion climate resilience loan, approved in March 2025, serves to address environmental challenges. The upcoming review by the IMF will decide on further disbursements under both arrangements. Pakistan maintains its counterterrorism commitments are internationally recognized and cautions against confusing financial programs with geopolitical disputes.
- The International Monetary Fund (IMF) announced that the Executive Board meeting regarding Pakistan's bailout program, worth $7 billion, will proceed as planned on May 9, 2025.
- The IMF board's discussion will include the first review of the ongoing bailout program and a new $1.3 billion arrangement under a climate resilience loan program.
- The ongoing tension between India and Pakistan, following a deadly attack in the Indian Illegally Occupied Jammu and Kashmir (IIOJK), has been cited as a politically charged issue, with India reportedly asking the IMF to reevaluate loans given to Pakistan.
- Pakistan has vehemently denied any involvement in the attack and has called for a neutral investigation, while India has suspended a critical river water sharing treaty and closed its airspace to Pakistan's airlines in response.
- The $7 billion IMF bailout program is crucial for Pakistan's $350 billion economy, and Islamabad claims that it has managed to stabilize under the program, helping it avert a default threat.
