High Tension in Pakistani Government... Here's Why...!

Pakistan, which is grappling with a severe economic crisis, is anxiously awaiting another tranche of financial assistance from the International Monetary Fund (IMF). However, India has strongly objected to this proposed funding, alleging that Pakistan diverts such international assistance towards terrorist activities and to bolster its military and intelligence establishments. These accusations by India have heightened the tension surrounding the IMF's upcoming review meeting, adding a new layer of urgency and controversy.

As part of the Extended Fund Facility (EFF), Pakistan is scheduled to meet with the IMF’s Executive Board tomorrow for the first review of its current loan arrangement. In this meeting, Pakistan is expected to request an additional $1.3 billion in financial aid. With the country already struggling due to a serious liquidity crunch, the disbursement of these funds is considered critical for its immediate economic survival.

Pakistan is currently facing a substantial fiscal deficit and is heavily reliant on IMF support to stabilize its economy. The review on May 9 will serve as an IMF assessment of how well Pakistan has implemented the required reforms that are prerequisites for the release of the next tranche of funding.

Previously, in 2023, Pakistan secured a $7 billion bailout package from the IMF. Additionally, in March 2024, it received another $1.3 billion to help combat the challenges arising from climate change.