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IMF Defends $1 Billion Pakistan Bailout Despite India’s Objection

May 23, 2025, 2:04 pm

The International Monetary Fund (IMF) has stood by its move to release $1 billion to Pakistan despite being strongly opposed by India. In a formal statement, the IMF stated that Pakistan had “met all the required targets” that would make it eligible for the most recent payment of financial assistance.

This release is under the Extended Fund Facility (EFF) program launched in September 2024, under which Pakistan has thus far gotten around $2.1 billion in fiscal support to alleviate its economic squeeze.

IMF Justifies Decision

IMF communications department director Julie Kozack outlined the reason for the approval at a press conference. “Our Board discovered that Pakistan had actually achieved all of the targets. It had made some progress on a few of the reforms, and because of that, the Board proceeded and approved the program,” she said.

Kozack then went on to detail the timeline: “The first review was scheduled to take place in the first quarter of 2025. And in line with that schedule, on March 25 of 2025, the IMF staff and the Pakistani authorities agreed on a staff-level deal for the first review of the EFF. That agreement, that staff-level agreement, was then submitted to our Executive Board, which finalized the review on May 9. Consequently, Pakistan took the disbursement at that point.

Under the terms of the new financial agreement, Pakistan consented to 11 new conditions. These consisted of obtaining parliamentary consent, raising the debt servicing surcharge on electricity bills, and lifting import restrictions.

India Protests IMF Support

India protested vehemently the IMF’s continued financial assistance to Pakistan. New Delhi officials alleged the bailout money had the potential of being diverted to finance cross-border terrorism.

Defence Minister Rajnath Singh severely condemned the decision, saying that IMF loans to Pakistan equated to ‘a form of indirect funding to terror’.

On May 9, one day ahead of a ceasefire pact between India and Pakistan—India formally criticized the IMF’s financial bailout.

“Over 35 years since 1989, Pakistan has received IMF disbursements in 28 years. There have been 4 IMF programs in the past 5 years since 2019. If the earlier programs had been successful in establishing a macro-economic policy framework, Pakistan would not have come to the Fund seeking another bail-out program,” India’s official statement said.

Loan Disbursed Despite Objection

In spite of India’s abstention from the vote and making a formal protest, the IMF went ahead with the bailout package. The fund said it was satisfied with Pakistan’s reform work and adherence to the conditions agreed upon, reaffirming that the disbursement was justified.

IMF Begins New Review of War-Torn Ukraine’s $15.5 Billion War Recovery Loan

May 20, 2025, 5:50 pm

The International Monetary Fund (IMF) has initiated the eighth review of the $15.5 billion Extended Fund Facility lending program to Ukraine. This review is mainly concerned with Ukraine’s war-hit economy, budgetary requirements, and continued financial reforms.

Both IMF delegates and Ukrainian authorities hope that there will be fruitful discussions, considering that Ukraine is still rebuilding in a state of war. On the whole, the lending program is an essential support mechanism for Ukraine in these testing times.

War’s High Price on Ukraine’s Economy

Throughout over three years of war with Russia, Ukraine’s economy has been laid to waste. As a result, millions have been displaced by the conflict, while cities, infrastructure, and supply chains have been virtually destroyed. Ukraine’s gross domestic product (GDP) dropped close to 30% in the first year of the war.

While the economy is still below pre-war levels, there has been modest growth in 2023 and 2024. Such growth, then, is a silver lining, but much remains difficult.

Budget Requirements and Debt Sustainability Under Scrutiny

Additionally, talks will center on how to fund Ukraine’s budget requirements in 2025. Although Ukraine has been able to secure financing for next year via international assistance, there remains doubt regarding continued support.

Ukraine’s domestic revenues are primarily spent on defense, while humanitarian and social programs depend heavily on Western ally economic support. The country is forecasting a budget deficit of approximately $38 billion during the current year. As such, debt sustainability will be critical to the stability of Ukraine’s economy.

Strengthening Financial Sector and Reforms

The review will cover reforms to stabilize the financial sector of Ukraine. Officials will debate state regulation of credit bureaus and the creation of financial market infrastructure. These reforms seek to increase resilience in the financial system of Ukraine and underpin long-term recovery.

Ukraine’s recovery hinges largely on sustained international financial assistance and domestic reforms. The IMF loan package provides an essential lifeline. As negotiations continue, the momentum will be on supporting Ukraine through the economic implications of the present conflict and towards a more stable future.

IMF Adds 11 More Conditions to Pakistan Bailout Deal

May 18, 2025, 3:07 pm

The International Monetary Fund (IMF) has imposed 11 new conditions on Pakistan’s bailout package and cautioned that the worsening tensions with India may jeopardise the programme’s fiscal, external, and reform objectives, The Express Tribune reported on Sunday.

These include the raising of the number of conditions linked to the IMF deal to 50, which further mounts the pressure on Pakistan as it negotiates the release of the next financial assistance tranche. Among the latest demands is the parliament’s approval of the next fiscal year’s Rs 17.6 trillion federal budget, which includes Rs 1.07 trillion for development schemes.

Political Tensions

As per the IMF Staff Level report, “Rising tensions between Pakistan and India, if continued or further deteriorate, could increase risks to the programme’s fiscal, external and reform objectives.” The report added that the hostilities between the two countries have intensified in the last two weeks. Nevertheless, financial markets have been relatively calm, with the stock market holding the bulk of recent gains and bond spreads having widened marginally only.

These tensions come after India’s precision strikes under ‘Operation Sindoor’ on May 7, in response to the April 22 Pahalgam terror attack that had claimed 26 lives. Pakistan sought to target Indian military facilities between May 8 and 10 in retaliation. A ceasefire agreement was arrived at on May 10 following four days of drone and missile exchange.

Reflecting the increased security issues, Pakistan’s defence budget has jumped to Rs 2.414 trillion—a rise of Rs 252 billion or 12%, according to the IMF report. The Pakistani government, however, indicated an even sharper rise, suggesting more than Rs 2.5 trillion, or an 18% increase, in the wake of its confrontation with India last month.

Budgetary and Governance Reforms

Among the IMF’s fresh financial conditions is that ‘parliamentary approval of the 2026 budget in accordance with the IMF staff agreement to achieve programme objectives by end-June 2025’ be obtained. Another condition requires provinces to implement new Agriculture Income Tax legislation. This involves establishing platforms for the filing of returns, identification of taxpayers, communication campaigns, and compliance improvementwith an end date of June this year.

A standalone requirement asks the government to release a governance action plan in accordance with the IMF’s Governance Diagnostic Assessment. The objective is to ‘publicly identify reform measures to address critical governance vulnerabilities’.

The government must also set out a post-2027 financial sector strategy. The roadmap, which is to be released shortly, will establish the regulatory and institutional frameworks for the period 2028 and beyond.

Energy Sector and Industrial Policy Conditions

The IMF has added four new energy-related conditions. These are publishing the yearly electricity tariff rebasing notice by July 1 and making a semi-annual gas tariff adjustment announcement by February 15, 2026, to maintain tariffs at cost recovery levels.

The IMF has also directed Pakistan to legislate the captive power levy ordinance into a permanent measure by May end, in order to compel industries to switch to the national power grid. Another parliamentary measure is to do away with the Rs 3.21 per unit maximum for the debt servicing surcharge. The IMF faulted the maximum, saying it disproportionately hurts sincere consumers while hiding inefficiencies in the power sector.

Blaming ineffective governance and ill-conceived energy policies, the IMF and World Bank attribute these to the accumulation of circular debt. Removal of the cap on the surcharge is to be completed by end-June.

Incentive Phase-Out and Car Import Easing

The IMF has also asked Pakistan to remove all the incentives attached to Special Technology Zones and other industrial zones by 2035. A detailed plan for this transition is to be provided by the end of the year.

In a consumer-oriented reform, the IMF requested that Pakistan bring to Parliament legislation that would remove all quantitative limits on the importation of used vehicles granted initially for automobiles up to five years of age, rather than the existing three years. The legislation should be brought before the end of July.

These broad conditions are designed to provide fiscal responsibility, openness, and structural changes as Pakistan tries to navigate economic issues as well as regional uncertainty.

IMF Unlocks $1.3B For Bangladesh As Dhaka Ditches Old Tax System In Bold Reform

May 14, 2025, 9:30 pm

International Monetary Fund (IMF) will release $1.3 billion to Bangladesh in June, after a currency exchange reforms breakthrough and the third review of a $4.7 billion loan program, the finance ministry said on Wednesday.

The installment comprises the fourth and fifth tranches of the IMF program, which were held up due to differing opinions on exchange rate flexibility. The IMF had demanded a crawling peg mechanism so that the Bangladeshi taka could appreciate or depreciate gradually based on market forces.

Following intensive talks in Dhaka and at the IMF and World Bank Spring Meetings in Washington, both sides agreed on reform frameworks for revenue management, fiscal policy, and foreign exchange rules.

The IMF confirmed a staff-level agreement for the combined third and fourth reviews under the Extended Credit Facility (ECF), Extended Fund Facility (EFF), and Resilience and Sustainability Facility. After approval by the IMF Executive Board and completion of necessary steps, Bangladesh will obtain Special Drawing Rights (SDR) 983.8 million (approximately $1.3 billion). In addition, the nation has applied for an additional SDR 567.2 million (approx. $762 million) in order to accommodate increasing external financing requirements and shore up its economy.

The authorities have committed reforms to reinforce monetary and fiscal policy, overhaul the tax system, and enhance the banking sector’s governance. One of the major steps is to abolish the National Board of Revenue (NBR) and instead create two finance ministry units, one for taxation policy and another for collection and administration, to enhance transparency and efficiency.

Bangladesh, which approached the IMF in 2023 for support following pressure on foreign reserves in the face of global commodity price shocks, has already received $2.3 billion under the first three tranches. An additional $2 billion budget support from development partners is expected by the interim government headed by Nobel laureate Muhammad Yunus.

Funds In, Drones Out: Pakistan Flexes Muscle After IMF Boost | TDG Explainer

May 10, 2025, 3:55 pm

In a matter of hours after the International Monetary Fund (IMF) had endorsed $1.1 billion to Pakistan under a Stand-By Arrangement (SBA) and a requested facility under the Resilience and Sustainability Facility (RSF) of $1.4 billion, hostilities broke out in South Asia. Missiles and drones brightened the pre-dawn horizon as Pakistan infringed on Indian airspace, provoking acrimonious responses.

This timing is no accident. It has always been part of a well-worn playbook. When Pakistan gets international money, especially from Western-backed institutions like the IMF, any government in Pakistan tends to turn that economic relief into geopolitical defiance,” says an Indian official.

The official further explained that economic crises may temporarily drive Pakistan to negotiate, but once funding is secured, its military regains confidence, leading to provocation. This pattern: financial aid followed by aggression has played out repeatedly, with the latest strikes impacting areas like Poonch, Rajouri, Uri, and Tangdhar.

Jammu and Kashmir Chief Minister Omar Abdullah was critical: “I fail to see how the ‘International Community’ believes that the present tension within the subcontinent will be eased when the IMF in effect remunerates Pakistan for all the ordnance which it is employing to annihilate Poonch, Rajouri, Uri, Tangdhar and so many other localities.”

India’s diplomats have also taken the initiative. Senior ambassadors and high commissioners in countries like the US and UK have put forth proof of Pakistan’s backing for terror organizations, such as images of Pakistani military officials standing next to globally sanctioned terrorists.

Paper Reform, Reality Military Budget

In a 2024 report, the IMF recognized Pakistan’s persistent vulnerabilities, observing: “Although the 2023–24 Stand-By Arrangement (SBA) helped restore economic stability, Pakistan’s vulnerabilities and structural issues are still significant. The new government elected following the February elections has continued to strengthen economic conditions and is launching a multi-year home-grown reform program to attain resilient and inclusive economic growth.”

In spite of the IMF’s insistence on fiscal reforms like reducing subsidies, increasing tax collection, and increasing energy tariffs…actual progress seems skewed. “The current fund insisted on tax reforms, cutting subsidies, and increasing energy prices. Pakistan complied on paper,” a government source said.

At the same time, defence expenditure is left untouched. Official budget papers disclose a planned 18% increase in defence expenditure, while social areas such as education, health, and welfare remain neglected. This reflects the state’s penchant for strategic bluster rather than real structural change.

A Pattern of Provocation

India has raised its concerns regarding the abuse of IMF funds at several international forums and even in board meetings. These alerts are based on a quarter-century history of post-bailout taunts. “From cross-border ceasefire violations to backing proxy players, Pakistan’s conduct has tended to harden in times after financial bailouts,” a veteran official well-versed in Pakistan’s 25 bailout packages history said.

Pakistani Premier Shehbaz Sharif, meanwhile, phrased the approval as a diplomatic victory and said, “hostile attempts to undermine the IMF program have failed.

But what keeps happening is a disquieting cycle: economic meltdown, global sympathy, aid, and back to regional brinkmanship. This trend poses serious questions for international financial institutions: Should aid be given without conditions that guarantee it won’t be used to finance aggression? Should there be tighter control on how defence and foreign policy are affected by bailout packages?

Until such is implemented, the world can keep seeing the contradiction of ‘missiles in pursuit of money’, a vicious cycle in which economic aid spurs new confrontation and not reform.

IMF Approves $1B Loan To Pakistan Amid Controversy Over Terrorism Funding Concerns

May 9, 2025, 11:50 pm

On Friday, the International Monetary Fund (IMF) approved the immediate release of about $1 billion to Pakistan under its current Extended Fund Facility (EFF). The move is made despite the objections raised by India over the misuse of the funds for cross-border terrorism.

The IMF also considered a new lending program for Pakistan, the Resilience and Sustainability Facility (RSF) worth $1.3 billion. In a statement, Pakistan Prime Minister Shehbaz Sharif was pleased with the approval, citing that the disbursement represented good news in Pakistan’s economic conditions and development opportunities.

India, however, raised its voice at an IMF board meeting, pointing to the threat of the money being diverted to state-supported terrorism. India voted against the package, but only abstained, citing a potential misuse of debt financing by Pakistan due to its history of financing cross-border terrorism.

Although the IMF recognized India’s concerns and abstention, it went ahead with the release, highlighting its interest in Pakistan’s economic revival. This go-ahead is a significant point for Pakistan, which is facing economic instability and needs international assistance to stabilize its financial system.

India Abstains from IMF Vote Citing Pakistan’s Terror Links After Pahalgam Attack

May 9, 2025, 11:25 pm

India abstains from the International Monetary Fund (IMF) vote on Pakistan’s loan program, citing Pakistan’s continued support for terrorism. This decision follows a series of cross-border attacks and growing tensions between the two nuclear-armed neighbours.

India Links IMF Vote to Pahalgam Terror Attack

India justifies its abstention by highlighting the April 22 terror attack in Pahalgam, where 25 Indian civilians and one Nepali citizen lose their lives. Suspected Pakistan-backed militants carry out the attack, targeting a group of Indian tourists. Indian officials say Pakistan-based groups plan and direct the assault from terrorist infrastructure in Pakistan and Pakistan-occupied Jammu and Kashmir (PoJK).

India states that approving financial assistance for Pakistan while it harbours terror groups contradicts global commitments to counter terrorism. New Delhi argues that the funding may end up indirectly sustaining hostile operations against Indian citizens.

India Launches Operation Sindoor Against Terror Camps

In direct response to the Pahalgam attack, the Indian Armed Forces launch Operation Sindoor, targeting nine terrorist sites across the border. Officials confirm that India strikes these sites in Pakistan and PoJK using precision operations. Indian forces avoid Pakistani military installations to ensure the action remains measured and non-escalatory.

“Our actions reflect our resolve to hold those behind the Pahalgam massacre accountable,” a senior defence official states. India aims to destroy the command and control centres responsible for directing cross-border terror strikes.

Security sources confirm that within the first 24 hours of Operation Sindoor, Indian forces neutralise at least three militants and dismantle multiple hideouts in the Pahalgam–Anantnag region.

Drone Attacks and Shelling Worsen Tensions

As India intensifies counter-terror operations, Pakistan escalates provocations. On May 8 and 9, Pakistan launches drone and missile strikes into Indian territory. Indian Air Defence intercepts several drones near Jammu and Rajasthan, but the attacks cause explosions and blackouts in multiple locations. Residents in Jammu hear air raid sirens and see power outages late into the night.

Both nations exchange fire along the Line of Control (LoC), further inflaming tensions. Pakistan criticises India’s IMF abstention as politically driven, but Indian diplomats insist that terrorism and economic support cannot go hand-in-hand.

India holds its ground, stating that it cannot support Pakistan financially while it refuses to dismantle terror infrastructure targeting Indian civilians.

IMF to Review $1.3 Billion Loan for Pakistan Amid Growing Tensions with India

May 9, 2025, 12:54 pm

International Monetary Fund (IMF) is considering an essential $1.3 billion credit package to Pakistan as part of a climate resilience program, intending to treat its environmental issue. Yet the upsurge of tensions between Pakistan and India since India’s Operation Sindoor along with blames posed against Pakistan over cross-border terror have added complication to approving such a credit facility.

India will likely protest the aid, and the IMF will have to navigate Pakistan’s economic interests carefully against the geopolitical interests of India. Here are the economic realities in Pakistan, the geopolitical realities surrounding the India-Pakistan crisis, and the possible ramifications of the IMF’s decision on the region and global diplomacy.

Pakistan’s Economic Turmoil and Call for IMF Funding

Pakistan has battled severe economic hardship for many years. It faces high inflation rates, a battered currency, and rising debt levels. Pakistan increasingly depends on foreign borrowing to prop up its economy.

The IMF has been a key financial partner, offering critical support during crisis periods. In 2024, the IMF signed a staff-level agreement with Pakistan under the Resilience and Sustainability Facility (RSF). The agreement would provide Pakistan with access to $1.3 billion to assist in addressing its climate challenges.

Though the loan would bring welcome financial relief, it is on stern terms. These are fiscal reforms and subsidy cuts, steps unpopular with many Pakistanis. The IMF board will consider if Pakistan fulfills these conditions before authorizing additional financial support.

Growing Tensions with India

Tensions between India and Pakistan have been escalating. India recently conducted Operation Sindoor, a series of targeted air strikes against Pakistan and Pakistan-occupied Kashmir. The operation was in retaliation for the Pahalgam terror attack, where 26 civilians lost their lives.

India has blamed Pakistan for sheltering terrorist organizations such as Lashkar-e-Taiba, which are suspected to have carried out the attack. Indian authorities contend that Pakistan’s patronage of such organizations undermines regional security.

India’s concern regarding cross-border terrorism makes Pakistan’s loan approval process difficult. For India, the IMF decision is not purely economic; it’s an issue of national security. Indian officials will protest when the loan is reviewed.

IMF’s Role in Global Financial Diplomacy

The main job of the IMF is to bring global economic stability. It offers finance to economies with problems. Nevertheless, the entry of the IMF into politically troubled areas, such as South Asia, comes with its complications.

In the past, the IMF has supported Pakistan in situations where there is political unrest. But its usual concentration is usually economic reform, and not on politics. It thereby tends to sidestep sides in controversies.

Although it maintains a neutral position, the IMF’s actions have political repercussions. India’s protests might make the IMF consider the way it acts towards Pakistan’s request for financial assistance. The IMF should take into consideration not only Pakistan’s economic requirements but also the security and political effects of its action in providing the country with financial aid.

Implications of the IMF’s Decision

The IMF’s move may have far-reaching effects on Pakistan and the global community. The approval of the loan will inject much-needed relief into Pakistan’s economy. This might stabilize the fiscal position of the country and ease the consequences of inflation and increased debt.

Certification would also mean global support for Pakistan’s climate resilience measures. Other global organizations, such as the World Bank and Asian Development Bank, can also imitate by extending more financial support.

Conversely, however, if the IMF suspends the loan, Pakistan may find itself in even more economic trouble. With inflation at historic peaks and foreign reserves running low, the nation may find it difficult to service its debt. This has the potential to result in further instability in the region.

The IMF’s move also sets a precedent for the way international financial institutions resolve disputes involving nuclear powers. The result will probably determine the treatment that other states, like North Korea or Iran, receive in comparable circumstances.

A Delicate Balance

IMF’s scrutiny of Pakistan’s $1.3 billion package isn’t economics only. It is a tricky call involving balancing support with geopolitical calculations. The IMF has to decide whether it must give top priority to the economic stability of Pakistan or attend to India’s security interests.

While the tension between the two nations is at an all-time high, all eyes will be on the IMF’s move. Will the IMF grant the loan, or will India’s reservations delay the approval? The move will have deep-reaching implications for Pakistan, India, and the global international community.

India to Oppose Pakistan’s $1.3 Billion IMF Loan Over ‘Support to Terrorism’

April 30, 2025, 11:34 am

India will likely vote against the proposed $1.3 billion IMF loan for Pakistan on the grounds of the country’s ‘support to terrorism’. The decision comes in the wake of the April 22 terror strike in Pahalgam that claimed 26 civilian lives. The International Monetary Fund board will take up the loan on May 9. India is set to raise cross-border connections as well as Islamabad’s abuse of IMF resources.

This time, New Delhi will not abstain but make a strong stance at the board meeting. In the meantime, External Affairs Minister S Jaishankar has contacted important UN Security Council members to generate diplomatic pressure. This increasing assertiveness indicates India’s determination to fight terror financing on the international front.

?India may block Pakistan’s $1.3B IMF loan, rising tensions over bailout talks. pic.twitter.com/RaRqvDdtLK

— Indian Infra & Geopolitics (@INDTechAndInfra) April 30, 2025

India’s Changing IMF Stance: From Silence to Action

In the last IMF review, India had abstained from voting on Pakistan’s $7 billion bailout. That fund aimed to stabilise Pakistan’s crumbling economy. However, the Pahalgam attack has shifted India’s position sharply.

Officials believe Islamabad continues to support cross-border terrorism while requesting global aid. India now seeks to hold Pakistan accountable by challenging its eligibility for international funding.

May 9 IMF Board Review

The IMF board will on May 9 examine Pakistan’s climate resilience plan. The offer comes with a $1.3 billion loan, conditional upon pledges under the previous $7 billion Extended Fund Facility. Subject to approval, the review can open vital money ahead of Pakistan’s June budget.

But opposition from India might lead to transparency and use-of-funds concerns from donor countries.

S. Jaishankar Rallies Global Support

In the aftermath of Pahalgam killings, S Jaishankar, India’s External Affairs Minister, contacted the counterparts from Algeria, Greece, Guyana, Panama, Slovenia, Sierra Leone, and Somalia. They are all the non-permanent members of the UN Security Council.

India alarmed at the cross-border nature of the terror plan. New Delhi is now demanding more international criticism of Pakistan’s actions.

Will India’s Influence Shatter IMF Policy?

India’s increasing clout in international forums lends strength to its position. If India manages to forge a coalition within the IMF board, it can stall or derail the release. This is part of a larger game plan: employ multilateral forums to target state sponsors of terror.

As India plays a more assertive role internationally, its policy could compel institutions such as the IMF to make funding conditional on anti-terror credentials.

Pahalgam Attack May Redefine Global Funding Politics

India’s reaction to the Pahalgam attack may be a turning point in the way terror links impact global finance. By resisting the IMF loan, India sends a clear message: countries can’t access international assistance while sheltering terror.

As the May 9 board meeting approaches, all eyes are still on whether India’s efforts will pay off — and whether the world is ready to act on terror financing at its source.

India’s Digital Surge Leaves Silicon Valley Behind — Experts Urge Reforms

April 9, 2025, 4:51 pm

India’s digital ecosystem has created new world-class benchmarks. Speaking at the CNN-News18 Rising Bharat Summit 2025, technology expert Vivek Wadhwa claimed that India now outpaces Silicon Valley in digital presence. He complimented the country’s affordable and fast internet and encouraged people to grasp their technological advantage.

Amid these achievements, experts at the summit pointed to a crucial lacuna. They called for deeper reforms, increased rural connectivity, and continued investments. As global recognition increases, India needs to tackle policy lags and increase digital inclusion to sustain its leadership.

Geopolitical shifts are rewriting alliances, redrawing power maps, and creating space for new leaders to rise. At the heart of this global reset stands India, bold, youthful, and ready to lead. Powered by the unstoppable drive of its youth and a renewed vision for innovation,… pic.twitter.com/f0GHsBGLCr

— Firstpost (@firstpost) April 6, 2025

Milestones in India’s Digital Journey

India’s journey to digital greatness has some notable accomplishments. The International Monetary Fund (IMF) identified India’s digital public infrastructure as a benchmark for other countries. Projects such as Aadhaar have made direct benefit transfers easier, curbing fraud and encouraging economic formalization.

The Unified Payments Interface (UPI) has revolutionized real-time payments, facilitating around 49% of the world’s transactions in 2023. The BharatNet project has also enabled more than 214,000 gram panchayats to be connected to high-speed internet, boosting rural connectivity.

Investment Requirements for Sustainable Development

Despite these achievements, there are large investments required to address the growing need for digital services. A collaborative report by EY and the Digital Infrastructure Providers Association (DIPA) approximates India’s digital infrastructure industry requiring up to $23 billion by 2025. Such funding is essential to fund the expected boom in online traffic and services in industries such as e-commerce, education, and healthcare. The report estimates that 330 million people will be covered by 5G services by 2025, highlighting the imperative to upgrade infrastructure.

Bridging the Urban-Rural Digital Divide

As urban centers witness exponential digital growth, rural areas are still struggling with poor internet connectivity and low digital literacy. To close this gap, BharatNet is seeking to provide broadband connectivity to more than 600,000 villages. In addition, digital literacy campaigns at the national level covering marginalized sections are critical for growth to be inclusive. Adoption of the Digital Personal Data Protection Act, 2023, is also critical to secure user data and ensure trust in digital ecosystems.

Emerging Technologies

In addition to infrastructure and literacy, India’s attention is now shifting towards emerging technologies. Artificial Intelligence (AI), Blockchain, and the Internet of Things (IoT) hold the potential to transform sectors across the board. These technologies, if deployed together, can make operations more efficient, generate employment opportunities, and establish India as a global technology leader. All this needs is sound policy frameworks, investment in research and development, and the availability of skilled manpower for adopting these innovations.

India’s digital emergence represents a revolutionary period of innovation and accessibility. With strategic investments, inclusive policies, and emerging technologies at the forefront, India can cement its status as a digital leader in the world, ensuring that the fruits of this revolution are shared by all.

IMF Backs Ukraine With $400M Boost As War-Torn Economy Fights For Stability

March 1, 2025, 1:24 am

The International Monetary Fund (IMF) and Ukraine signed a staff-level agreement on the seventh review of Ukraine’s Extended Fund Facility (EFF) of $15.5 billion program, the IMF stated on Friday.

The deal comes after eight days of talks between IMF officials and Ukrainian officials and, when approved by the IMF’s executive board, would release around $400 million in funds. It comes at a pivotal moment for Ukraine, which is still struggling with the economic consequences of war and uncertainty over future foreign financial aid.

Gavin Gray, head of the IMF team, underlined that the EFF program helped stabilize the economy of Ukraine during continuing challenges. “Ukraine’s four-year EFF Arrangement with the IMF remains a strong anchor for the authorities’ economic program in a period of exceptionally high uncertainty,” Gray said.

The IMF also noted that the program is still on track with the help of important external support. Ukraine’s finance ministry concurred in an independent statement that the nation is still committed to putting the agreed reforms into action.

The deal highlights the IMF’s continued role in the support of financial stability in Ukraine as the country continues to weather wartime economic challenges. Executive board approval will bring much-needed finance to Ukraine to continue economic reform and ensure financial stability amid long-term geopolitical uncertainty.

IMF Team To Examine Pakistan’s Anti-Corruption Measures Ahead Of Loan Review

February 9, 2025, 8:51 pm

According to the finance ministry, which made an announcement over the weekend, a three-member delegation from the International Monetary Fund (IMF) is set to visit Pakistan to conduct a Governance and Corruption Diagnostic Assessment under the country’s 2024 Extended Fund Facility (EFF) program. The respective dates of the visit have not been disclosed.

The assessment will make recommendations to strengthen governance and integrity and reduce the risks of corruption, the ministry said, adding that it will play a significant role in the structural reforms of Pakistan.

“The mission will assess vulnerabilities against six key state functions: fiscal governance, central bank governance and operations, financial sector oversight, market regulation, rule of law, and anti-money laundering and countering the financing of terrorism (AML-CFT),” according to the statement.

It will be positive support to what is already in the pipeline with respect to greater transparency and increasing institutional capacity.” The country’s government welcomed technical assistance from the IMF. The South Asian nation is receiving a $7 billion bailout IMF deal, finalized in September, as part of an economic recovery process. IMF will review progress made by the country by the end of March, with government and the central bank being bullish about achieving necessary targets.

IMF Raises UK Growth Forecast, Warns Of Potential Risks From Trump’s Economic Policies

January 18, 2025, 1:15 am

The international Monetary Fund upgraded UK forecast for growth into 2025. Its economists have seen UK’s GDP advance by as much as 1.6 per cent to end 2025, reversing earlier estimates from that of a modest 1.5%. This is good news for the Labour government because, according to the IMF, growth is being put down to increases in investment spending, improvements in household finances, and interest cuts by the Bank of England. The IMF projects that the UK economy will grow by 0.9% in 2024.

For instance, the IMF trimmed down growth outlooks for large economies in the eurozone-major economies like Germany, France, and Italy. For Germany, its growth forecast for 2025 was trimmed down from 0.8% to 0.3%, while for France it was trimmed down to 0.8%.

The Bank of England is expected to trim the rate by four quarters, bringing the rate down to 3.75% from the current level of 4.75%. Initial expectations of only two cuts are now looking higher with some reduced inflation and a weak set of retail sales reports.

IMF analysts noted that the Labour government’s fiscal policies are aimed at decreasing long-term UK debt. Chancellor Rachel Reeves underlined that the UK is on track to be the fastest-growing major European economy over the next two years and pointed out her commitment to growth through strategic investment and reform.

The IMF’s World Economic Outlook indicates that this year and the next will be marked by steady growth at 3.3% globally, though still below pre-pandemic levels. IMF Chief Economist Pierre-Olivier Gourinchas warned against possible risks brought by the policies of the new US administration through large-scale tax cuts, import tariffs, and regulatory rollbacks destabilizing both the US and global economies.

The IMF alerted that such measures would raise US debt, drive up inflation, and even threaten the credibility of using dollars as world currency. As such, relaxed regulations and policies would destabilize world trade while investment levels reduced financial instability in a country’s economy, added the IMF.

India in intelligent era, tech-driven governance

January 17, 2025, 12:50 am

BJP formed a third successive government under the leadership of Prime Minister Narendra Modi. Since the inception of the third government, we have witnessed a significant development in policy to boost digital aged governance reforms. As announced by IMF, the Indian economy has become the fifth largest in the world and is currently the fastest-growing large economy globally. Over this decade, the government’s Budget has tripled from RS 16 lakh crore to RS 48 lakh crore. Among many milestones, one stands out for symbolising India’s qualitative transformation—the leadership of the Narendra Modi government.

For decades, Indian governance model was characterised by dysfunctionality and corruption. This was famously quoted by Rajiv Gandhi, then Prime Minister in the late 1980s when he noted that out of every RS 100 allocated, only RS 15 reached its intended recipient, he quoted in his election rallies. This leakage, corruption, and inefficiency defined India’s governance for six and a half decades after Independence and got curtail after recently Prime Minister Narendra Modi assumed his office, bringing with his vision of ‘Maximum Governance’.

In the era of technological dominating society, we are observing remarkable technological transformation. This paradigm shift and tech driven institutional arrangement is no longer about potential—digital age is now a reality that is reshaping economies, improving and empowering lives. India has also recently seen first-hand how technology can empower countries that were once marginalised, enabling them to leap into a new era of opportunities.
The Indian government is stepping towards advancement in technologies like AI and regulate the domain with significant caution and ensuring security and data sovereignty. Broadly, Indian government supports innovation driven governance and AI regulation. To unlock this dead lock government brings the blueprint of a New Digital India act. The government commitment also reflected in the G20 Ministerial Declaration made during India’s presidency, as well as a statement in Parliament in April 2023 that “[the Indian government] is not considering bringing a law or regulating the growth of AI in the country.

AI ecosystem will enhance the capacity, scope to work for governance meanwhile AI-enabled harms and security concern exist at various levels. Therefore, while the governance of the tech stack is a priority, governance of the organisations developing AI solutions, or the people behind the technology, could also be productive.
Even as democratisation has made AI more accessible, assigning responsibility and defining accountability for the operation of AI systems have become more difficult. There are ongoing debates about who is responsible for the harms emanating from AI.

India is completing its 100 years in 2047, and present dispensation is observing it as Amrit Kal and taking policy steps to bring in line of reforms to strengthen, empowering and making more effective governance. It will be focused on priorities NextGen reforms and quote “In this decade of Amrit Kaal, we will give priority to Next Generation Reforms. We will ensure that all facilities like service delivery should reach citizens up to the last mile; it should reach the last person seamlessly, without hesitation or any kind of difficulty. For the overall development of the country, unnecessary interference by the Government and Government processes in the lives of the people has to be ended” – Prime Minister Narendra Modi

The government attempted to improve the ecosystem’s transparency and speed by simplifying procedures and processes at every level. Various citizen-centric initiatives, including redressing public grievances and disposing of service delivery applications, have been undertaken by the government to expand the outreach of service delivery mechanisms and make them more effective. The emphasis was on projecting the immense potential of technology to bring citizens and government closer, as a powerful tool to empower citizens as well as a medium to optimize transparency and accountability in day-to-day functioning.

In the era of technological advancement, Artificial intelligence (AI) is transforming societies, industry ecosystem across the board as leaders recognize the technology’s potential to improve productivity, enhance creativity, boost quality, and generate new solutions. Opening new domain will be game-changer while many leaders also acknowledge that mitigating risks associated with AI can lead to a competitive advantage and fundamentally contribute to their success. Therefore, adopting the technology ethically and responsibly has become a key consideration, leading to the rapid emergence and adoption of AI governance.
AI is changing work culture ecosystem and enabling the way of working and lives, providing unprecedented advantage to organisations, individuals and society. Its developing a new technological culture, which is self-adaptive, sensitive and self-reliant.

Future holds even greater promise as it converges with other advancements such as quantum, bio-technologies and other nature inspired technological developments. It has become necessarily for governments to adopt new technologies with preventive measure to meet with NextGen aspirations and societal advancements. Recently, Prime Minister Modi had quoted AI as Aspirational India, which roll the opening the boundaries of Government and its commitment.
“Thinking about the future allows us to imagine what kind of future we want to live and how we can get there.”

Satyendra Tripathi is Chairman, LokNeeti India; Secertary General, East Africa Foundation & a social political activist. Visiting Fellow, India Foundation.

IMF MD predicts Indian Economy to be ‘Little Weaker’ in 2025

January 11, 2025, 1:08 pm

Aaccording to IMF Managing Director Kristalina Georgie the Indian economy will be “a little weaker” in 2025. She said the global growth will be steady, but there is major uncertainty over the global economic landscape, mainly about the trade policies of the US.

Global economic growth is to have been stable going into 2025 according to Georgieva, however that regional variations of this were certain. Georgieva says while the US economic performance exceeded anticipation, EU witnessed something which could only be termed stagnating. However when it comes to India she commented that that shall be little lesser, and no further clarifies why. More details will be provided during the World Economy Outlook update.

Economic Policy Directions

The IMF Managing Director expressed her concerns about uncertainty, especially in economic policies. She said that the decisions of the new US administration on tariffs, taxes, deregulation, and government efficiency will be critical, especially with regard to global trade policy. This uncertainty, she explained, is contributing to higher long-term interest rates, even though short-term rates have declined.

Challenges for Low-Income Countries

Georgieva also indicated that emerging markets remain vulnerable to the economic shocks. Deflationary forces and low domestic demand persist as challenges facing the economy of China. About inflation, IMF projects that continued global disinflation will take place, and with advanced economies convergence more quickly than emerging markets into inflation targets.

US Trade Policy Under Trump

This uncertainty is worse since this is under the leadership of the newly inaugurated 47th President of the United States, Donald Trump, as he assumes his post on January 20. While campaigning and addressing the electorate during his speech, he announced intentions to set even more taxes for countries such as China, Canada, and Mexico. Therefore, he will make tariffs a central tool in his economic agenda.

Concluding, Georgieva noted that higher interest rates to contain inflation haven’t triggered a global recession, but have yielded the desired effects in terms of the fall in inflation, as the same is now falling steadily to the target level in advanced economies.

Pakistan Implements Strict Reforms to Secure IMF Loan

December 3, 2024, 6:58 am

To secure a $1.1 billion loan from the IMF, Pakistan has enforced several tough measures. The government now mandates civil servants and their families to disclose their assets. Furthermore, it has eliminated tax exemptions and amnesties, according to reports.

IMF Sets 39 Conditions

The IMF has attached 39 conditions for loan approval. For instance, the government must submit a corruption assessment report and maintain foreign exchange reserves covering three months of imports.

Moreover, Pakistan must meet strict fiscal targets and restructure public finances. Additionally, it must limit the difference between open market and interbank exchange rates to 1.25%. By the end of the fiscal year, the State Bank of Pakistan must achieve $8.65 billion in reserves.

Specific Deadlines and Fiscal Limits

According to the Ministry of Finance, Pakistan must fulfill 22 key benchmarks. Notably, civil servants must disclose their assets by February 2025. At the same time, the government is barred from giving grants beyond the approved budget.

Furthermore, public sector liabilities cannot exceed PKR 5.6 trillion. Likewise, power sector arrears must stay under PKR 417 billion, while tax refund backlogs are capped at PKR 24 billion.

Finance Minister Highlights Urgency

During a briefing, Finance Minister Muhammad Aurangzeb stressed the importance of these reforms. He acknowledged the macroeconomic stability achieved over the last 14 months. However, he emphasized the need to reduce intermediaries to control inflation. He stated, “This IMF agreement serves as Pakistan’s final message to the international community for urgent economic reforms.”

Additionally, the Economic Coordination Committee (ECC) will now review food prices monthly to prevent price surges.

Long-Term Economic Plans

Aurangzeb also raised concerns about climate change, child stunting, and the growing number of out-of-school children. Moreover, he announced a 10-year partnership with the World Bank to strengthen economic stability.

Encouragingly, the stock market has shown positive trends, signaling early signs of recovery. In conclusion, these reforms are a significant step toward meeting IMF requirements and stabilizing Pakistan’s economy.

In Financial Crunch, Pakistan Asks IMF For $1 Billion, Seeks Additional Support

October 25, 2024, 1:30 am

Pakistan has officially requested $1 billion in funding from the International Monetary Fund’s facility designed to assist low- and middle-income countries in addressing climate risks, Finance Minister Muhammad Aurangzeb announced on Thursday (October 24).

“We have formally requested to be considered for this facility,” Aurangzeb told Reuters during the IMF/World Bank autumn meetings in Washington. He noted that Pakistan hopes to finalize the request in the coming months.

The IMF has already approved a $7 billion bailout package for Pakistan, but further funding is accessible through the Resilience and Sustainability Trust (RST).

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The RST, established in 2022, provides long-term concessional financing for climate-related projects, which include adaptation measures and transitioning to clean energy.

According to the Global Climate Risk Index, Pakistan is among the countries most vulnerable to climate change.

In addition to discussions with the IMF, Pakistan is also in negotiations with the Asian Infrastructure Investment Bank (AIIB) for credit enhancement on its planned Panda bond, as stated by Aurangzeb. This Panda bond would represent Pakistan’s first foray into China’s capital markets.

The initial bond issuance, aimed at raising $200-250 million, is expected by the end of June.

Pakistan is also in discussions with West Asian banks for commercial loans, with one bank submitting a “significant proposal,” according to Aurangzeb.

He mentioned that Pakistan is engaging with other institutions for credit enhancements. These enhancements, which provide guarantees for bonds, can improve their ratings, attract more investors, and lower borrowing costs.

Aurangzeb stated that Pakistan’s foreign exchange reserves should reach $13 billion by the end of March, which would strengthen its ability to secure commercial loans and potentially enhance its credit rating.

As of October 18, Pakistan’s foreign exchange reserves were reported at $11.04 billion, according to the central bank.

In recent months, credit rating agencies have made slight upgrades to Pakistan’s ratings. Moody’s raised its rating to ‘Caa2’ in August, citing improving macroeconomic conditions, while Fitch increased its rating to CCC+ in July following the IMF staff-level agreement. However, both ratings remain below investment grade.

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IMF Cuts Borrowing Costs For Indebted Nations Amidst Rising Criticism

October 12, 2024, 4:32 pm

The International Monetary Fund (IMF) has decided to lower borrowing costs for some of the world’s most heavily indebted countries, responding to mounting criticism over what many view as excessively punitive fees during a period of elevated interest rates.

The IMF’s executive board announced a reduction in surcharges—additional fees applied to countries that borrow beyond their allotted share or take longer to repay their loans. These surcharges have primarily affected major borrowers, including Argentina, Egypt, Ukraine, and Ecuador.

Managing Director Kristalina Georgieva stated on Friday that the adjustment would decrease borrowing costs for IMF member countries by 36%, translating to an annual savings of $1.2 billion. The number of countries subject to surcharges in the fiscal year 2026 is expected to drop from 20 to 13.

However, it remains uncertain whether this change will satisfy critics of the surcharge system. Leaders from various countries, including Argentina and Brazil, have called for an outright suspension of the fees. The reduction in surcharges is modest compared to the staggering $1.62 trillion in dollar-denominated debt owed by emerging markets, with $132 billion due next year, according to Bloomberg data.

Georgieva is scheduled to meet with global financial leaders in Washington later this month and aims to demonstrate the IMF’s commitment to addressing the concerns of indebted nations. She indicated that the reforms would increase the threshold for imposing surcharges and reduce the margin over the prevailing interest rate.

Traditionally, the IMF has imposed these fees to discourage heavy reliance on its financial support. Despite the pressure to eliminate or suspend the surcharges entirely, the IMF board maintained that these fees are crucial for prudent borrowing practices and for filling the fund’s precautionary balances. Earlier this year, the IMF met its $34 billion target for these balances ahead of schedule, reducing the urgency to collect the surcharges.

Pakistan Economy In Resurgence With 3.07% Growth Sparks Hope For Stability

October 1, 2024, 4:34 pm

Pakistan’s economy has outperformed expectations, recording a 3.07% growth in the second quarter, driven by support from the International Monetary Fund (IMF) and lower interest rates. The Pakistan Bureau of Statistics released this data on Monday, revealing that this growth surpassed the 2.7% forecast from a Bloomberg economist survey and improved from the revised growth rate of 2.36% in the January-March period. The overall growth rate for the fiscal year that ended in June was also adjusted upward to 2.52% from an earlier estimate of 2.38%.

After facing a series of political and economic crises that nearly pushed the nation to default last year, Pakistan has begun to stabilize with financial assistance from multilateral lenders and friendly countries. Foreign exchange reserves have improved from critically low levels, and previously imposed import and currency restrictions have been lifted, positively impacting industrial activity. Inflation has decreased, allowing the monetary authority to reduce borrowing costs by 450 basis points since June.

Last week, the government secured IMF approval for a new $7 billion loan program, providing financial certainty for the coming years. However, Pakistan is still faced with approximately $26 billion in loan repayments for the fiscal year that commenced in July.

In terms of sector performance, the agriculture sector saw a significant increase of 6.76% during the quarter, largely due to a bumper wheat crop, while the services sector grew by 3.69%. Prime Minister Shehbaz Sharif’s administration has committed to achieving sustainable economic growth through structural reforms and projects a growth rate of 3.6% for the year ending June 2025.

Pakistan Secures $7bn IMF Loan As China, Saudi Step In Amid Economic Struggles

September 26, 2024, 10:40 am

The International Monetary Fund (IMF) has approved a $7 billion loan for Pakistan, providing a lifeline for the cash-strapped country. Prime Minister Shehbaz Sharif, who led the negotiations since June, expressed gratitude to IMF Managing Director Kristalina Georgieva and her team for their support.

Sharif, speaking on the sidelines of the United Nations General Assembly, highlighted the “strict” conditions imposed by the IMF for the 37-month loan program, which he hopes will be Pakistan’s final bailout. The Prime Minister acknowledged crucial support from China and Saudi Arabia, without specifying their contributions to securing the deal.

Pakistan’s external debt currently exceeds $130 billion, with nearly 30 percent owed to China, its closest ally. Over the next three years, the country is set to repay around $90 billion, with a major payment due by December. Financial assistance from allies and IMF loans have helped Pakistan meet its external obligations in the past.

To align with IMF requirements, the government has committed to raising its tax revenue, despite resistance from retailers and opposition parties over new tax policies and soaring electricity costs.

Pakistan has faced repeated boom-and-bust economic cycles, leading to 22 IMF bailouts since 1958. Currently, it ranks as the IMF’s fifth-largest debtor, owing $6.28 billion. The latest economic crisis, marked by record inflation, brought the country to the verge of default last year. While inflation has eased, Moody’s recently upgraded Pakistan’s credit rating, citing improved macroeconomic conditions and liquidity.

Pakistan Set for 24th IMF Bailout Amid Economic Crisis

September 25, 2024, 2:18 pm

Pakistan is on track to receive its 24th financial rescue since 1958, with the International Monetary Fund (IMF) expected to approve a new bailout. The IMF board is scheduled to meet on Wednesday to discuss the aid package, which is anticipated to be around $7 billion.

Optimism from Pakistan’s Finance Minister

Finance Minister Muhammad Aurangzeb expressed optimism ahead of the IMF meeting, indicating that the loan would likely be approved. According to ARY News, Aurangzeb noted that under the deal, Pakistan would receive an initial tranche of $1-1.5 billion soon after approval.

IMF Conditions and Agreement

In July, Pakistan reached a staff-level agreement with the IMF, having met nearly all the conditions set by the global financial institution. This paved the way for the upcoming financial assistance, as reported by the Express Tribune.

Economic Prospects Look Positive

Aurangzeb highlighted Pakistan’s improving economic indicators, noting that the policy rate had been lowered, investor confidence was growing, and inflation was easing. Additionally, he mentioned the second phase of the China Pakistan Economic Corridor (CPEC) was about to begin, focusing on monetizing the infrastructure developed so far.

Improved Current Account and Market Conditions

The finance minister pointed out that Pakistan’s current account showed a surplus of $75 million in August. He added that with lower oil prices, a more stable dollar, and aggressive interest rate cuts, the country’s current account is expected to remain in good shape.

Aurangzeb remains hopeful that Pakistan’s economic situation will continue to improve in the coming months.

World’s Most Indebted Countries: Know Where India Stands and Who Tops the List?

August 9, 2024, 11:47 pm

According to World Statistics based on the IMF report, the list of the most indebted countries for 2022 ranks nations based on their debt as a percentage of their GDP. Here’s the detailed list:

1. Japan: Japan tops the list with debt amounting to 216% of its GDP.

2. Greece: Greece follows with debt at 203% of its GDP, which is double the country’s total GDP.

3. United Kingdom: The UK is third, with debt reaching 142% of its GDP.

4. Lebanon: Lebanon’s debt stands at 128% of its GDP. This country is also grappling with severe war-related crises.

5. Spain: Spain has a debt that is 111% of its GDP. The country has been struggling with economic difficulties following the Russia-Ukraine war and the COVID-19 pandemic.

6. United States: The US is notable on this list with debt equal to 110% of its GDP. This is surprising given its status as one of the wealthiest nations.

India: India has a debt that is 46% of its GDP. Despite this relatively lower percentage, India is the fastest-growing country in terms of debt increase.

This data highlights the significant debt challenges faced by various countries, with Japan and Greece being the most heavily indebted relative to their GDP. India’s debt levels are comparatively lower, but its rapid growth in debt is noteworthy.

India Could Become a $55 Trillion Economy by 2047: IMF Executive Director

August 1, 2024, 12:39 pm

Former Chief Economic Advisor and current IMF Executive Director, KV Subramanian, predicts India could achieve a staggering $55 trillion economy by 2047 if the nation sustains an 8% annual growth rate. While this ambitious target exceeds estimates from other organizations like Ernst & Young and Goldman Sachs, Subramanian’s calculations consider factors such as post-2016 inflation targeting, reduced rupee depreciation, and the power of compounding.
He explains that maintaining an 8% real growth rate coupled with 5% inflation would result in a 12% growth rate in dollar terms. This pace would double India’s GDP every six years, leading to a fourfold increase over the 24 years to 2047. Starting from India’s $3.28 trillion GDP in 2023, this growth trajectory would propel the economy to approximately $52 trillion by 2047.
Subramanian envisions India as the world’s third-largest economy by 2047, surpassing both the US and China in per capita income, reaching $40,000. He emphasizes that consistent 8% growth and controlled inflation are crucial to achieving this ambitious economic goal.

IMD Forecasts 7% GDP Growth For India This 2024-25

July 16, 2024, 8:46 pm

With Barely days left for the presentation of the Union budget for FY 2024-25, the international monetary fund has revised the growth from 6.8 percent to 7 percent.

This development comes around the time, when IMF has predicted global growth, to be 3.2 percent. In addition, it has revised its prediction for downward for Japan and United states of America.

It has cited the reasons like slower start of the year and disruption of temporary supply behind this static growth.

In addition, the IMF has also thrown light on several risks plaguing the global economy. These include factors like inflation, tensions in trade and uncertainty regarding policies.

As for Asia, Countries like China & India are predicted are anticipated to be main centres of growth. The prediction for China has been set upward to 5.0% this year. Owing to its revival of private consumption and strong exports.

But notably, IMF has warned, that China is still in risk due to weak trust and unsolved problems of property sector. Thus, it might lead to greater dependency on external sector.

Reason Behind Its Revision?

This revision is done on the expected improvement in private consumption, especially in country’s rural areas.

As for FY 2025-26, the financial agency still kept the estimate at 6.5% growth for India’s GDP. It still remains the same.

But the financial agency still underscores the importance of cautious monetary policy adjustments to deal with the issues like sticky inflation. Which can deteriorate due to start of trade or geopolitical tensions.

Pakistan Secures $7 Billion IMF Aid To Address Economic Issues

July 13, 2024, 1:34 pm

Pakistan and the International Monetary Fund (IMF) have reached a landmark agreement on a $7 billion aid package, aimed at stabilizing the nation’s struggling economy. This 37-month Extended Fund Facility (EFF) arrangement builds on the economic stability achieved under the 2023 Stand-by Arrangement (SBA).

In an overnight statement, the IMF confirmed the staff-level agreement, which is still subject to approval by the IMF’s Executive Board. The Washington-based lender emphasized that the new program seeks to support Pakistan’s efforts to solidify macroeconomic stability and foster conditions for stronger, more inclusive, and resilient growth.

The program includes measures to strengthen fiscal and monetary policies, reform state-owned enterprises (SOEs), and broaden the tax base. Additionally, it aims to enhance competition, ensure a level playing field for investment, improve human capital, and expand social protection through the Benazir Income Support Programme (BISP).

Continued robust financial support from Pakistan’s development and bilateral partners is deemed critical for the success of this program. An IMF team led by Nathan Porter, IMF’s Mission Chief to Pakistan, conducted discussions with Pakistani officials during a staff visit to Islamabad from May 13-23, 2024.

The new EFF arrangement aims to build on the macroeconomic stability achieved in the previous year by further strengthening public finances, reducing inflation, rebuilding external buffers, and eliminating economic distortions to encourage private sector-led growth. Under the agreement, Pakistan has committed to increasing tax revenues by 1.5% of GDP in FY25 and 3% over the program’s duration. This will be achieved through simpler and fairer direct and indirect taxation, including the proper inclusion of net income from the retail, export, and agriculture sectors into the tax system.

Additionally, both federal and provincial governments have agreed to rebalance spending activities, with provinces taking steps to enhance their tax-collection efforts, particularly in sales tax on services and agricultural income tax.

This latest agreement represents Pakistan’s continued reliance on the IMF for economic support. Earlier this year, the IMF approved the release of the final $1.1 billion tranche of a $3 billion bailout to Pakistan. Finance Minister Muhammad Aurangzeb indicated the government’s intention to seek a long-term loan to stabilize the economy post-bailout.

The deal comes just two weeks after Pakistan approved a tax-heavy budget for the 2024-25 fiscal year, aligned with IMF requirements. Analysts note that the new budget, totaling approximately $68 billion, aims to qualify Pakistan for a long-term IMF loan of $6 billion to $8 billion to help stabilize the economy. In 2023, Pakistan was on the brink of defaulting on its foreign debt payments.

This agreement marks a crucial step in Pakistan’s efforts to address its persistent economic challenges and secure a more stable financial future.

Pakistan Meets IMF Conditions For $6 Billion Bailout

July 3, 2024, 12:50 pm

Pakistan is on the verge of securing a significant financial rescue deal from the International Monetary Fund (IMF). The country has fulfilled all the necessary requirements set by the IMF, according to Ali Pervaiz Malik, Pakistan’s Minister of State for Finance, Revenue, and Power. The expected bailout, exceeding $6 billion, aims to prevent another economic crisis.

Challenging Revenue Goals

To meet the IMF’s conditions, Pakistan has set ambitious revenue targets in its annual budget. The government aims to collect 13 trillion rupees ($47 billion) in taxes for the fiscal year that began on July 1. This target represents a nearly 40% increase from the previous year. Additionally, Pakistan plans to reduce its fiscal deficit to 5.9% of its gross domestic product (GDP), down from 7.4% the previous year.

Steps Toward Economic Stability

Malik emphasized that the challenging budget was designed to pave the way for the IMF program. “There are no major issues left to address now that all major prior actions have been met, the budget being one of them,” he said. The IMF has yet to respond officially, but Malik is hopeful for a final agreement within the next three to four weeks.

Public Discontent

While the budget reforms may satisfy the IMF, they have sparked public dissatisfaction due to new tax measures. Malik acknowledged the difficulties but stressed that the IMF program is crucial for economic stabilization.

Economic Insights

Economist Sakib Sherani, from Macro Economic Insights, highlighted the urgency of the IMF deal to support Pakistan’s foreign exchange reserves and currency. Delays could force the central bank to re-impose import and capital controls, creating uncertainty and potentially affecting the stock market.

Market Reactions

Despite public concerns, the stock market has responded positively. Pakistan’s benchmark share index, the KSE-100, rose by 1% on Wednesday, reaching a record high of 80,348 points. The index has rallied about 10% since the budget announcement on June 12, driven by optimism over the anticipated IMF bailout.

In summary, Pakistan is on track to secure a substantial IMF bailout by meeting the lender’s stringent conditions. While the budget measures are tough and unpopular, they are seen as necessary steps towards economic stability and growth.

India Alongside Authoritarian Regimes? IMF Slams USCIRF’s International Religious Freedom Report

June 27, 2024, 11:03 pm

The Indian Minorities Foundation Fund (IMF) has condemned the latest International Religious Freedom report released by the United States Commission on International Religious Freedom (USCIRF). The IMF has expressed significant concerns regarding the report’s inclusion of India in the same category as authoritarian regimes such as Afghanistan, Cuba, North Korea, Russia, and China.

The IMF argues that such a comparison fails to recognize India’s established democratic framework, its dynamic civil society, and its rich history of pluralism. By grouping India with nations known for their oppressive governance, the report misrepresents the true nature of religious freedom in the country.

India, renowned for its vibrant democratic processes and cultural diversity, stands in stark contrast to the regimes highlighted in the USCIRF report. The IMF emphasizes that India’s commitment to religious freedom and its constitutional protections for all citizens are integral to its national identity.

IMF strongly condemns the USCIRF’S International Religious freedom report. USCIRF’s efforts to label India alongside authoritarian regimes like Afghanistan, Cuba, North Korea, Russia, and China overlook India’s democratic framework, vibrant civil society, and pluralistic history.… pic.twitter.com/jHYGY6lPqp

— Indian Minorities Foundation (@Minoritiesfdn) June 27, 2024

This mischaracterization by the USCIRF in the International Religious Freedom Report not only undermines its own credibility but also suggests a lack of nuanced understanding of India’s unique religious landscape. The IMF’s critique calls for a more accurate and contextually informed assessment of religious freedom worldwide, ensuring that democratic nations like India are justly represented in international reports.

IMF Maps AI Preparedness: Where Does India Stand Among 174 Countries?

June 27, 2024, 10:25 pm

The International Monetary Fund (IMF) unveiled its AI Preparedness Index (AIPI) Dashboard on Tuesday, offering insights into the readiness of 174 global economies for artificial intelligence (AI) integration. Countries were categorized into Advanced Economies (AEs), Emerging Market Economies (EMs), and Low-Income Countries (LICs). Leading the pack are Singapore (0.80), Denmark (0.78), and the United States (0.77) among AEs, while India, with a score of 0.49, falls under EMs, ranking 72nd globally.

The index evaluates readiness across digital infrastructure, human capital policies, innovation, economic integration, and regulatory frameworks. According to IMF research, AI could impact 33% of jobs in AEs, 24% in EMs, and 18% in LICs, reshaping global employment dynamics significantly. Economist Giovanni Melina highlighted AI’s potential to boost productivity and create new jobs but cautioned against exacerbating inequality.

The (AI Preparedness Index) AIPI Dashboard serves as a critical tool for policymakers and researchers to assess readiness and formulate inclusive policies harnessing AI’s transformative potential while mitigating its socio-economic impacts.

IMF Emphasizes Need For Energy Sector Reforms In Pakistan

May 24, 2024, 1:51 pm

The International Monetary Fund (IMF) has highlighted the importance of reforming Pakistan’s energy sector for economic progress, as reported by ARY News.

Discussions between the IMF and Pakistani authorities concluded successfully, following deliberations led by IMF mission chief Nathan Porter, who arrived in Pakistan on May 13.

Porter emphasized ongoing policy discussions to finalize financial support for Pakistan’s reform efforts, focusing on key areas like inflation control, public service enhancement through SOE restructuring, and private sector development.

Pakistan recently completed a short-term USD 3 billion program with the IMF and is now seeking a new loan program, potentially amounting to at least USD 6 billion. Additionally, the country may request extra financing from the IMF’s Resilience and Sustainability Trust.

The IMF’s reform program aims to transition Pakistan towards resilient and inclusive economic growth. Porter reiterated the significance of reforms amidst persistent economic challenges, stressing the focus on rejuvenating Pakistan’s economy rather than solely the loan package size.