Why May 9 Is Critical For Pakistan: IMF's Rs 110,552,678,340 Loan In Focus Post Operation Sindoor

Pakistan, which is still reeling from India's strike on terror camps on May 7, has another test awaiting them. The cash-strapped nation is scheduled to meet the IMF executive board on May 9 for the first review of the Extended Funding Facility (EFF) as Pakistan seeks another $1.3 billion from the IMF. The meeting has now even more significance as it comes just days after India's 'Operation Sindoor', which decimated nine terror sites in Pakistan and Pakistan-occupied Kashmir.

Notably, India has formally urged the IMF to reassess the loans extended to Pakistan, a senior Indian government source told Reuters on Friday, amid rising tensions between the two countries following a deadly terror attack in Kashmir.

India has raised objections with the IMF over its financial assistance to Pakistan, alleging that the funds indirectly enable the country to divert domestic resources toward its military-intelligence apparatus — including the ISI — and terror groups such as Lashkar-e-Taiba (LeT) and Jaish-e-Mohammed (JeM).

Amid a deepening fiscal crisis, Pakistan remains heavily dependent on IMF support through its economic stabilisation programme. The IMF’s next review, slated for May 9, will evaluate whether Pakistan has met the necessary reform benchmarks to unlock the next tranche of funding.

In 2023, Pakistan secured a $7 billion bailout from the IMF, followed by an additional $1.3 billion in March 2024 to support climate resilience. These are significant sums for a country with a modest economy of around $350 billion.

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