IMF Defends $1 Billion Bailout to Pakistan Amid India’s Concerns Over Terror Funding

The International Monetary Fund (IMF) has defended its recent $1 billion (over Rs 8,000 crore) disbursement to Pakistan, affirming that the country had “met all the required targets” necessary for the bailout.

The IMF Executive Board approved the payment on May 9, even as tensions between India and Pakistan escalated following Operation Sindoor — a military operation by the Indian Armed Forces targeting terror infrastructure in Pakistan and Pakistan-Occupied Kashmir (PoK), which prompted retaliatory shelling and drone attacks from Pakistan.

IMF Communications Director Julie Kozack emphasized that the disbursement was made based on merit and adherence to agreed reform benchmarks. “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 stated during a media briefing.

She further noted that a staff-level agreement was reached on March 25, 2025, for the first review of the Extended Fund Facility (EFF), which was then formally approved by the Board on May 9. This led to the $1 billion disbursement. In total, Pakistan has received $2.1 billion under the $7 billion EFF program agreed upon with the IMF last year.

Addressing the ongoing conflict between India and Pakistan, Kozack expressed sympathy and called for peace: “We extend our condolences for the loss of life and human suffering resulting from the recent conflict. We sincerely hope for a peaceful resolution between the two nations.”

The IMF’s comments come in the wake of India’s objections to the financial support, with Indian officials warning that the funds could potentially be diverted to support terrorist infrastructure. Indian Defence Minister Rajnath Singh recently criticized the bailout, suggesting it could amount to “indirect funding of terror.”

“The funds that India contributes to the IMF should not, directly or indirectly, be used to support terrorism in Pakistan or elsewhere,” Singh said.