IMF imposes 11 new conditions on Pakistan, warns it against risks to bailout programme: Report
The Hindu
IMF imposes 11 new conditions on Pakistan, including budget approval and lifting import restrictions on used cars.
The International Monetary Fund (IMF) has slapped 11 new conditions on Pakistan for the release of the next tranche of its bailout programme and warned that tensions with India could heighten risks to the scheme's fiscal, external, and reform goals, according to a media report on Sunday (May 18, 2025).
The new conditions imposed on Pakistan include the parliamentary approval of a new ₹17.6 trillion budget, an increase in the debt servicing surcharge on electricity bills and lifting restrictions on import of more than three-year-old used cars.
The Express Tribune newspaper said the Staff Level report, which the IMF released on Saturday (May 18, 2025), also said 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".
The report further stated that tensions between Pakistan and India have risen significantly over the past two weeks, but so far, the market reaction has been modest, with the stock market retaining most of its recent gains and spreads widening moderately.
The IMF report has shown the defence budget for the next fiscal year at ₹2.414 trillion, which is higher by ₹252 billion or 12%.
Compared to the IMF's projection, the government has indicated allocating over ₹2.5 trillion or an 18% higher budget, after confrontation with India early this month.
India carried out precision strikes under ‘Operation Sindoor’ on terror infrastructure early on May 7 in response to the April 22 Pahalgam terror attack that killed 26 people.
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