IMF Turns Screws, Slams Pakistan With Fresh Conditions, Warns Conflict With India Could Sink Bailout

New Delhi: As Pakistan’s financial frailty teeters at the edge, the International Monetary Fund (IMF) has signalled a hardening of stance. It has slapped Islamabad with 11 contemporary coverage necessities to unencumber its subsequent bailout tranche. This brings the entire choice of prerequisites to a staggering 50. The newest determination displays the worldwide lender’s rising unease now not simply over Pakistan’s financial mismanagement but in addition within the wake tensions with India.

Beyond fiscal and structural reforms, Pakistan’s geopolitical behaviour is now at the radar. The caution is apparent: if tensions with India persist or aggravate, Pakistan’s already-weak fiscal programme may just resolve altogether.

The message is as political as it’s monetary.

India’s precision airstrikes underneath ‘Operation Sindoor’ on May 7, according to the April 22 Pahalgam terror assault, rattled now not most effective Islamabad but in addition global observers. Pakistan’s tried retaliation by the use of drones and missiles most effective worsened the outlook. And whilst a ceasefire was once introduced on May 10, the IMF is unconvinced the calm will closing.

The IMF’s determination, as in line with reviews, is without delay related Pakistan’s struggle posture that may possibility in price range execution, international reserves and reform timelines. Notably, the IMF has flagged Pakistan’s ballooning defence expenditure, which is projected to exceed Rs 2.5 trillion for 2025-26, as a key vulnerability. That is an 18% hike pushed via army tensions, whilst the rustic struggles to supply electrical energy and curb inflation.

Behind the scenes, the reviews counsel, IMF personnel had been alarmed via the Pakistan’s executive’s plans to shift price range clear of building to defence after the flare-up with India. They view it as Pakistan’s financial indiscipline. They say it’s about alternatives Pakistan is making within the face of a disaster.

Following are the brand new IMF-imposed reforms – Parliament should cross the approaching Rs 17.6 trillion federal price range – with strict adherence to IMF benchmarks; Its provinces should put in force agricultural source of revenue taxes lengthy avoided via feudal energy agents; and a long-awaited governance roadmap should in spite of everything be printed.

Long a black hollow of subsidies and inefficiencies, the ability sector additionally faces tighter scrutiny. Tariffs are set to be rebased yearly, fuel costs adjusted bi-annually and prison frameworks tightened round captive energy and surcharges. The Rs 3.21 in line with unit cap on electrical energy debt servicing shall be lifted – a transfer prone to lift expenses for already-struggling families.

But in all probability maximum symbolic of the IMF’s micromanagement is its directive on used automobiles: Pakistan should ease import restrictions, extending allowances from 3 to 5 years via July 2025. It’s a small transfer with giant implications for middle-class customers and the import-heavy auto sector.

For Prime Minister Shehbaz Sharif, the squeeze is actual. With falling reserves, investor skepticism and now expanding exterior prerequisites tied to regional behaviour, his executive walks a tightrope. Any misstep – army or financial – may just value Pakistan dearly within the courtroom of global lenders.

As international consideration specializes in Pakistan’s subsequent transfer, one fact is changing into more difficult to forget about – the rustic’s economic system is now not an issue of stability sheets and budgets, it’s now a geopolitical bargaining chip. And the IMF is asking the photographs.