The International Monetary Fund (IMF) has defended its recent decision to release a $1 billion loan to Pakistan, even though India strongly opposed the move. In an official statement, the IMF clarified that Pakistan fulfilled all the necessary criteria to qualify for the financial assistance.

Pakistan Meets IMF Conditions

The loan is part of a larger bailout programme provided to help Pakistan deal with its economic troubles. This support is offered under the Extended Fund Facility (EFF), which was approved in September 2024. So far, Pakistan has received about $2.1 billion through this programme.

During a media briefing, Julie Kozack, Director of the IMF’s Communications Department, explained that Pakistan was eligible for the funding. "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.

She also outlined the review process,  "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."

IMF Imposes New Conditions on Pakistan

Reports suggest that the IMF placed 11 new conditions on Pakistan for this disbursement. These include gaining approval from Parliament, increasing the debt servicing surcharge on electricity, and removing some import restrictions.

India Criticizes IMF’s Decision

India, however, has protested the decision to grant further funds to Pakistan. Officials in New Delhi argued that the money could be misused to support terrorism. India’s Defence Minister, Rajnath Singh, condemned the IMF aid, saying it amounts to “indirect funding to terror.”

On May 9, just a day before a ceasefire between the two countries, the Indian government issued a strong statement against the IMF’s decision. It expressed concerns over repeated bailouts given to Pakistan despite a lack of long-term improvements. "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," the statement said. Despite India’s protest and its decision to abstain from voting, the IMF board still approved the package.