‘Met All Targets’: IMF Defends $1 Billion Bailout to Pakistan Amid India’s Terror Funding Concerns
The International Monetary Fund (IMF) has defended its recent $1 billion bailout to Pakistan, asserting that Islamabad had fulfilled all reform targets necessary for the disbursement. The statement comes just days after India warned the global lender that such aid could indirectly fund terrorism following renewed military tensions between the two neighbours.
On May 9, the IMF’s Executive Board approved the second tranche of a $7 billion Extended Fund Facility (EFF) package to Pakistan, releasing $1 billion in aid. The approval coincided with heightened regional tensions following India’s launch of Operation Sindoor, a military strike on terror bases in Pakistan and Pakistan-Occupied Kashmir (PoK), prompting retaliatory shelling and drone strikes from across the border.
During a press briefing, Julie Kozack, Director of the IMF’s Communications Department, confirmed that Pakistan met the economic and structural reform benchmarks laid out by the fund.
“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 said.
She elaborated that a staff-level agreement was reached on March 25, 2025, following which the Executive Board concluded the first review and authorised the disbursement on May 9.
Kozack also commented on the broader geopolitical conflict, saying,
“We extend our sympathies for the loss of life and the human toll from the recent conflict. We hope for a peaceful resolution between India and Pakistan.”
The IMF’s clarification follows a stern statement from Indian Defence Minister Rajnath Singh, who last week accused the fund of enabling Pakistan to channel money into terrorism.
“The funds India gives to IMF should not be used, directly or indirectly, to create terror infrastructure in Pakistan or any other country,” Singh said, calling the bailout a “form of indirect funding to terror.”
India has reportedly urged the IMF to reconsider the aid in light of what it called Islamabad’s continued support for cross-border terrorism.
Pakistan has been struggling with a severe economic crisis marked by inflation, currency devaluation, and dwindling foreign reserves. The $7 billion IMF agreement, signed in 2024, aims to stabilise the country’s economy through strict reforms, including tax expansion, subsidy cuts, and increased transparency in public finance.
So far, Pakistan has received $2.1 billion under the programme, with the recent tranche being the largest single disbursement.
