IMF confirms Pakistan funding issue didn’t come up for voting Today World News

The IMF’s statement, made as part of a press conference by its director of communications Julie Kozack in Washington on May 22, 2025, confirms the May 10, 2025 report by The Hindu which explained that the matter did not come up for a vote because it was a continuation of an earlier agreement, and was not a fresh loan. Photo: X/@IMFSpokesperson

The International Monetary Fund has officially confirmed that the May 9, 2025 decision by its Executive Board to provide additional funds to Pakistan did not come up for a vote and was instead a unanimous decision. India abstained from this unanimous decision, citing Pakistan’s “poor track record” in utilising such funds.

The IMF’s statement, made as part of a press conference by its director of communications Julie Kozack in Washington on May 22, 2025, confirms the May 10, 2025 report by The Hindu which explained that the matter did not come up for a vote because it was a continuation of an earlier agreement, and was not a fresh loan. 

The IMF board on May 9 approved a total of $2.4 billion in funding to Pakistan — $1 billion as part of a larger $7 billion Extended Fund Facility (EFF) and an additional $1.4 billion under a Resilience and Sustainability Facility (RSF).

The Hindu has also learnt that, in the run up to this decision, Finance Minister Nirmala Sitharaman and other officials of the government went to considerable lengths to try to garner support over the issue of funding to Pakistan. However, since there was no vote, the loan was still granted.

India will also send a dossier to terror financing watchdog Financial Action Task Force (FATF) before its plenary meeting in June to push for the re-inclusion of Pakistan in its ‘grey list’ of countries that are subject to increased scrutiny. It will also lobby with the World Bank to prevent it from providing Pakistan additional funding.

During her press conference, Ms. Kozack explained that the IMF Executive Board approved Pakistan’s EFF program in September 2024 and the first review was planned for the first quarter of 2025. In keeping with that timeline, the IMF staff and the Pakistan authorities on March 25 reached a staff-level agreement following that first review.

“That agreement, that staff-level agreement, was then presented to our Executive Board, and our Executive Board completed the review on May 9,” Ms. Kozack said. “As a result of the completion of that review, Pakistan received the disbursement at that time.”

She further emphasised that the Executive Board, while conducting such reviews, looks at whether the program is on track, whether the conditions under the programme have been met, and whether any policy changes are needed to bring the programme back on track. 

“And in the case of Pakistan, our Board found that Pakistan had indeed met all of the targets,” Kozack explained. “It had made progress on some of the reforms, and for that reason, the Board went ahead and approved the programme.”

She added that, in general, IMF Board decisions are taken by consensus, and in this case, “there was a sufficient consensus at the Board” to allow the Board to decide to move forward and complete Pakistan’s review.

According to government sources, India tried very hard to sensitise the IMF and its members about how the timing of the fund release, coming just a few weeks after the Pahalgam terror attack and two days after India’s response in the form of Operation Sindoor, was problematic.

“The Finance Minister spoke to the IMF managing director, Kristalina Georgieva, before she left for Milan (May 4) for the ADB meet,” a government official aware of the developments told The Hindu.

“During the call, she informed the MD that India is not against developmental assistance to any country, but that the timing for such funding was not right due to the border tensions,” the official added. 

Another source added that India also pointed out that the IMF’s own data showed a strong correlation between when the IMF releases funds to Pakistan, and when Pakistan increases its defence spending.

“Pakistan’s arms imports increased dramatically from 1980 to 2023 by over 20% on average in the years when it received IMF disbursements in comparison to years when it did not receive the same,” the source explained.

Apart from speaking to the IMF MD on the phone, Ms. Sitharaman also met the finance ministers of Germany, Italy, and France in person in Milan and spoke to them about the Pakistan issue, it has been learnt. 

In addition, Indian ambassadors in various IMF member countries, including in the U.S., appealed to the respective finance ministries or treasury departments. Several future actions are also underway.

“India will send a dossier to the FATF about including Pakistan in the terror grey list again,” the first government official said. “In 2022, Pakistan was removed from the list and one of the conditions was that it would enact an anti-terror law. That law hasn’t come, so the FATF itself has enough reason to put Pakistan back on the list. India’s dossier will add to this.”

The FATF will hold its plenary meeting in June. In addition, the World Bank is likely to discuss in June a $20 billion funding package for Pakistan, which, too, India will “strongly oppose”, the official said.