Islamabad: The International Monetary Fund has imposed 11 new conditions on Pakistan for the release of the next fund tranche as part of its bailout programme. This increased the number of conditions to 50.
In a staff-level report, IMF warned that “rising tensions between India and Pakistan, if sustained or deteriorate further, could heighten risks to the fiscal, external and reform goals of the programme.” On May 9, the United Nations financial agency approved a fresh $1 billion financial assistance programme for Islamabad as part of its bailout package.
The conditions imposed by the IMF included Islamabad having to secure parliamentary approval for a new $62.2 billion budget, implementing an increase in the debt servicing surcharge on electricity bills and lifting restrictions on the import of used cars that are older than three years, the report stated.
The IMF imposed the new conditions in relation to lending worth $7 billion, the report added. The condition of securing parliamentary approval of the 2025-’26 Budget “was in line with the IMF staff agreement to meet programme targets by the end of June”, the report said. Another condition was that the Pakistani government must publish a governance action plan based on the recommendations of the IMF’s Governance Diagnostic Assessment, according to a report.
The IMF report projected the country’s defence budget for the next fiscal year to be $8.5 billion, the newspaper reported. Islamabad, however, has indicated 18% higher allocation for defence after military tensions with New Delhi escalated earlier this month.
On May 9, India raised concerns about the efficacy of IMF’s programmes for Pakistan “given its poor track record, and also on the possibility of misuse of debt financing funds for state-sponsored cross-border terrorism.”
