Winning Bizness Desk

Mumbai.Pakistan has secured a new round of financial assistance from the International Monetary Fund, receiving 1.2 billion dollars to stabilise its struggling economy. The approval includes a one-billion-dollar loan and an additional 200 million dollars under a climate support window. IMF praised Pakistan for holding its economic direction steady despite persistent challenges. This is the second major approval for Islamabad after the September Operation Sindoor period, underlining its deep dependence on global lenders.

Economic programme review leads to fresh approval

IMF’s Executive Board completed two reviews of Pakistan’s economic programme before clearing the latest funds. The package is part of a 37-month bailout scheme agreed in 2024, through which Pakistan is set to receive a total of 7 billion dollars in phases. So far, Islamabad has received 3.3 billion dollars since last year. India had earlier raised concerns when IMF cleared the May disbursement, arguing that Pakistan could misuse global funds for cross-border terror operations and had therefore stayed out of the voting.

Key concerns raised earlier by India

In the earlier meeting, India had warned IMF about the risk of its funds being diverted. India’s position highlighted:

• Cross-border militancy being supported from Pakistani soil
• Global agencies facing reputational harm if money is misused
• Risk that multilateral financial assistance could fuel state-linked terror activity
• Importance of ensuring transparent usage of global support

Loan conditionalities linked to reforms and stability

For every instalment, Pakistan must meet specific reform targets set by IMF. These include rebuilding foreign exchange reserves, strengthening the tax system and reducing the losses of public sector enterprises. Under the separate climate facility, Pakistan must improve disaster readiness, water use efficiency and climate-related financial reporting. Islamabad, for many decades, has relied heavily on IMF and friendly nations to keep its economy afloat.

Pakistan’s rising debt and the scale of burden

Pakistan’s total debt as of July 2025 stands at 80.6 trillion Pakistani rupees. Of this, 54.5 trillion rupees is domestic debt, while 26 trillion rupees counts as foreign debt. The overall burden has jumped nearly 13 percent compared to July 2024. Midway through this crisis, Pakistan remains one of South Asia’s most indebted nations, with weak foreign reserves and limited new revenue sources.

Governance structure and global voting dynamics at IMF

IMF decisions are taken by a 24-member Executive Board, where each director represents one country or a group of nations. Voting power depends on financial quotas, which reflect a country’s economic size and stability.

At IMF:

• All 191 members have 250 basic votes each
• Additional votes come from IMF’s currency unit called SDR
• A member gets one vote for every one lakh SDR it holds
• This combined total decides final voting strength

In the fag end of the story, the broader point remains clear: without US support, no decision can go through because IMF requires 85 percent votes for approval. India holds about 2.75 percent votes, while Pakistan’s share is just 0.43 percent. The latest approval shows that despite sharp geopolitical disagreements, economic rescue mechanisms continue to operate under global financial rules.