IMF endorses Pakistan’s economic and climate reform efforts with major funding, while India expresses strong dissent
10 May 2025, New Delhi
In a significant move, the International Monetary Fund (IMF) has approved a combined $2.4 billion financial package for Pakistan, recognizing progress in both economic stabilization and climate resilience. This includes $1 billion under the Extended Fund Facility (EFF) and $1.4 billion through the Resilience and Sustainability Facility (RSF), aimed at supporting climate adaptation and disaster preparedness.
The IMF Board’s decision follows the first successful review of Pakistan’s 37-month EFF program. Deputy Managing Director Nigel Clarke acknowledged Pakistan’s efforts to restore macroeconomic stability, citing key indicators such as inflation falling to 0.3% in April and foreign reserves rising to $10.3 billion, with projections nearing $14 billion by June 2025.
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India, however, opposed the approval, abstaining from the vote and warning that continued financial support to Pakistan could harm the credibility of global institutions. Indian authorities accused Islamabad of enabling cross-border terrorism, urging greater accountability in such funding decisions.
The IMF insisted that its backing was predicated only on Pakistan’s policy performance in spite of criticism. It praised the country’s fiscal discipline, including a 2.0% GDP primary surplus in the first half of FY25, and highlighted reforms in taxation, energy efficiency, and public services.
Pakistani officials welcomed the decision as an endorsement of their economic direction. While acknowledging the progress made, the IMF cautioned that continued structural reforms and prudent fiscal policies remain essential to long-term stability and growth.
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