Pakistan Secures $1 Billion IMF Tranche, Blocks Indian Objection Over "Terrorism" Claims
Pakistan secures $1B IMF funding under the EFF program, with an additional $1.3B RSF approved for climate resilience. Despite India’s political objections, IMF backs Pakistan's reform progress.
On May 9, 2025, Pakistan achieved a major economic milestone as the International Monetary Fund (IMF) approved a $1 billion loan tranche under the 37-month Extended Fund Facility (EFF). This latest release pushes total disbursements under the program to $2 billion, offering critical support to Pakistan’s reform agenda.
In parallel, the IMF also greenlit a $1.3 billion Resilience and Sustainability Facility (RSF) to be disbursed over 28 months, aiming to strengthen Pakistan’s response to climate change through long-term green infrastructure and sustainable growth policies.
This decision follows the staff-level agreement reached in March 2025, part of a broader $7 billion bailout package that began in July 2024.
Despite India's attempts to block the funds, alleging links between Pakistan and the April 22 attack in Indian-administered Jammu & Kashmir (which left 26 dead), the IMF dismissed the objection, choosing to focus on economic performance and reform commitments rather than unverified accusations.
Prime Minister Shehbaz Sharif responded strongly, calling the IMF decision a "clear rejection of propaganda" and "a vote of confidence in Pakistan’s reform drive."
“This $1 billion isn’t just a loan—it’s a signal to the world that Pakistan is committed to reform and no amount of noise will derail our economic recovery,” said PM Sharif.
India’s Foreign Secretary Vikram Misri reportedly urged the Indian representative on the IMF board to object to the funding. However, Pakistan denied any role in the attack, and the IMF emphasized that political allegations do not interfere with technical economic assessments.
The loan provides much-needed breathing room to Pakistan’s $350 billion economy, which has faced inflation, fiscal stress, and low reserves. As of May 2, 2025, the State Bank of Pakistan (SBP) reported $10.33 billion in reserves, while total reserves stood at $15.48 billion.
Analysts say the EFF supports long-overdue reforms including agriculture taxation in Sindh and Balochistan, energy sector restructuring, and climate resilience under the RSF. These steps aim to stabilize Pakistan’s economy while ensuring long-term sustainability.
India’s attempts to label Pakistan as a source of instability are not new. However, the IMF's continued support signals that international institutions are focused on facts, reforms, and progress—not political narratives.
Finance Minister Muhammad Aurangzeb stated, “Pakistan has met tough IMF conditions. This approval reinforces global trust in our roadmap.”
As tensions along the Line of Control (LoC) remain high, Pakistan is pushing forward with economic recovery as its top priority.
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