Jobaaj Stories
The International Monetary Fund (IMF) executive board has approved a new $1.4 billion loan for Pakistan under its climate resilience fund. In addition, the IMF gave the green light to the first review of Pakistan’s $7 billion program, unlocking approximately $1 billion in cash. This decision marks a crucial step in stabilizing Pakistan’s economy amid global challenges.
IMF’s Support for Pakistan’s Economic Stabilization
The IMF’s executive board expressed confidence in Pakistan’s efforts to stabilize its economy. In a statement, the IMF noted that the policy measures taken under the ongoing program have already contributed significantly to rebuilding confidence, despite the difficult global environment.
"This is a significant step in supporting Pakistan’s recovery," the IMF said, adding that the review brings disbursements under the $7 billion program to $2 billion. However, no new funds were immediately released from the climate resilience loan.
Growing Tensions and India’s Concerns
Despite the positive review, tensions have risen between India and Pakistan, further complicating the situation. India has formally requested the IMF to review its loans to Pakistan, citing concerns over potential misuse of funds for terrorism. The call for a broader review stems from the recent violence in Indian Kashmir, which saw an attack on Hindu tourists, killing 26 people. This incident led to the worst clashes between the two nations in nearly three decades.
India expressed its concerns to the IMF during the meeting, raising the possibility that funds meant for economic recovery could be diverted for cross-border terrorism.
Pakistan’s Rejection of India’s Claims
In response to India’s concerns, Pakistan’s Prime Minister, Muhammad Shehbaz Sharif, strongly rejected the claims. He stated that “India’s attempts to sabotage the IMF program have failed,” and reiterated Pakistan’s commitment to using the funds for climate resilience and economic recovery.
The staff-level agreements for both the $7 billion program and the climate resilience loan were finalized before the latest escalation of hostilities between the two nations.
