IMF Warns Pakistan of Risks, Sets 11 New Conditions for Continued Support

New Delhi (The Uttam Hindu): The International Monetary Fund (IMF) has put 11 more new conditions in front of Pakistan for a loan of 7 billion dollars. Along with this, tension with India has been described as a big risk.

According to the Pakistani newspaper Express Tribune, the new conditions imposed include approving a new budget of Rs 17.6 lakh crore, increasing the debt servicing surcharge on electricity bills and lifting the ban on import of cars older than three years. An IMF report released on Saturday said that if the tension between India and Pakistan increases, it will have a negative impact on the neighboring country's treasury, foreign trade and reforms. The report further said that tensions between Pakistan and India have increased significantly in the last two weeks, but so far the market reaction has been modest and the stock market has maintained its recent gains.

The IMF has estimated that Pakistan's defence budget for the next fiscal year could be Rs 2.414 lakh crore, an increase of Rs 25,200 crore or 12 per cent. Compared to the IMF's estimate, the government has indicated to allocate more than Rs 2.5 lakh crore, which marks an 18 per cent increase after the conflict with India. The IMF has also imposed a new condition of obtaining parliamentary approval of the FY 2026 budget in line with the IMF Staff Agreement to meet program targets by the end of June 2025. "The IMF has imposed 11 more conditions on Pakistan for a mere $7 billion loan, taking the total number of conditions to 50," the Express Tribune reported. The IMF said that out of Pakistan's Rs 17.6 lakh crore budget, only Rs 1.07 lakh crore is to be spent on development, while there is a fiscal deficit of Rs 6.6 lakh crore.