IMF Slaps 11 New Conditions On Pakistan, Flags Tensions With India After Op Sindoor As Major Risk For Bailout Programme

The IMF has reportedly slapped 11 new conditions for Pakistan to unlock the next tranche of its bailout programme, cautioning that worsening tensions with India could jeopardise the programme’s fiscal, external, and reform milestones, NDTV reported, citing local Pakistani media reports.

Key conditions include passing a Rs 17.6 trillion federal budget through Parliament, raising electricity bill surcharges for debt servicing, and easing restrictions on importing used cars older than three years.

According to The Express Tribune, the IMF’s staff level report flagged that "rising tensions between India and Pakistan, if sustained or deteriorate further, could heighten risks to the fiscal, external and reform goals of the programme".

The report further stated that tensions between Pakistan and India have risen significantly over the past two weeks, but so far, the market reaction has been modest, with the stock market retaining most of its recent gains and spreads widening moderately.

Pakistan's defence budget for the coming year stands at Rs 2.414 trillion—up by Rs 252 billion or 12 per cent—as noted in the IMF report.

The Pakistani government reportedly plans to push the defence allocation to over Rs 2.5 trillion—18 per cent, much above the IMF’s estimates—following clashes with India earlier this month.

India launched ‘Operation Sindoor’ on 7 May targeting terror camps in response to the 22 April Pahalgam attack in which 26 innocent people, mostly tourists, were killed by Pakistani terrorists.

Pakistan responded with attempted strikes on Indian military bases using drones and missiles from 8 to 10 May but Indian air defence systems neutralised them.

India retaliated by striking Pakistan's military air bases, following which Pakistani military requested for a ceasefire.

An understanding was reached on May 10 to de-escalate hostilities after four days of heavy drone and missile exchanges.

With these 11 additions, Pakistan now faces 50 conditions under the IMF bailout, The Express Tribune reported.

One condition mandates Parliament’s approval of the FY26 budget, aligned with IMF targets, by June 2025.

The Pakistani federal budget size, as projected in the IMF report, stands at Rs 17.6 trillion, with Rs 1.07 trillion earmarked for development.

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