Saturday, March 29, 2025
Washington, May 9, 2025 —
While India conducts Operation Sindoor under heightened military alert, a crucial decision about Pakistan’s financial future will unfold today in Washington. The International Monetary Fund (IMF) is holding a meeting to discuss whether to approve a new loan for Pakistan — a move that India firmly opposes.
The Pakistani government, facing deepening economic trouble due to escalating war tensions with India, has publicly appealed for aid. In a recent tweet, Pakistan’s Finance Division called for urgent financial help from the IMF, World Bank, and “friendly nations,” citing the strain of the ongoing conflict. The message admitted that the war has weakened the country’s financial position, pushing it closer to default.
India has informed the IMF that Pakistan should not receive further loans. Indian officials argue that Pakistan continues to support terrorism and funding such a nation would, in effect, endorse extremism.
Indian diplomats will raise these objections during today’s IMF meeting. A senior Indian official stated, “Pakistan is a state that promotes instability in the region. Supporting it financially rewards destructive behavior.”
Pakistan’s economic woes resemble a no-win situation. If it withdraws from the conflict due to financial strain, it risks public backlash. But continuing the war only worsens its economy.
Currently, Pakistan owes massive amounts to China, the U.S., and Saudi Arabia, in addition to repeated bailouts from the World Bank and IMF. By the end of 2024, Pakistan’s total debt crossed $130 billion, with 20% of it owed to China alone.
The country’s foreign exchange reserves have dropped to just $15 billion, barely enough for three months of imports. In September 2024, Pakistan secured a $7 billion IMF bailout to stabilize its currency and inflation. The plan showed early signs of success—until it chose to escalate tensions with India.
Last month, an IMF report noted that Pakistan had begun managing external pressure, inflation, and disaster recovery better. However, renewed conflict now threatens that progress.
Today’s meeting in Washington is not just about Pakistan. It carries broader implications for regional stability. India, already on high alert through Operation Sindoor, views IMF support for Pakistan as counterproductive during active hostilities.
As global eyes turn to Washington, today’s IMF decision may reshape financial and strategic dynamics in South Asia. The question remains — should a nation at war, accused of harboring extremism, receive international financial aid?
Whether Pakistan receives the loan or not, the world will be watching closely.
