The International Monetary Fund (IMF) is to have a very critical board meeting today, during which India will reportedly seek suspension of economic assistance to Pakistan. This follows the April 22 Pahalgam terrorist attack, which has escalated regional tensions.
Indian Foreign Secretary Vikram Misri reiterated at a press conference on Thursday that the IMF needs to think long and hard before giving further assistance to Pakistan. Misri further said, “There is an IMF board meeting tomorrow, and I am sure our Executive Director will make India’s point. But the facts of Pakistan’s fiscal record should be clear to those who have always bailed out the country.”
Misri mentioned that even with several financial support schemes offered by the IMF in the last thirty years, few of them have been successfully completed. “This is a very important decision for IMF board members who need to think long and hard about the fiscal realities before they provide additional assistance,” he continued.
Earlier today, Pakistan’s Economic Affairs Division (EAD) requested more loans from its international allies, citing massive losses with continuing conflict. In a statement uploaded to the social media platform X, the EAD further said, “While there is increased conflict and market volatility in the stock market, we urge our international allies to support de-escalation.”
As was previously reported by Moneycontrol on May 6, India will likely ask both the World Bank and the IMF to reconsider providing lending support to Pakistan in future meetings, expressing fears about the effective usage of such support.
As per the IMF official statistics, Pakistan has been provided a total of $6.1 billion in outstanding purchase and loan agreements since 1984. The latest $7 billion agreement, approved in September 2024, is on a 37-month Extended Fund Facility (EFF) program with six performance reviews. The following $1 billion tranche will be disbursed provided the next review is completed to satisfaction.
In a related development, India’s alternate director on the IMF board, Parameswaran Iyer, will attend today’s crucial meeting. Iyer’s interim appointment follows the premature end of KV Subramanian’s three-year term which expired six months earlier than expected.
Iyer’s attendance at today’s board meeting will be important because the IMF’s 25-member Executive Board typically operates by consensus but occasionally holds formal votes. Every member’s voting power is determined by a combination of simple votes and quota-based votes, which the member countries’ financial contributions are tied to. India’s quota in the IMF is 2.75 percent, and thus it has a 2.63 percent allocation of total voting power. The United States has the largest allocation, with a quota weight of 17.42 percent and a 16.49 percent allocation of total votes corresponding to it.
The present board meeting will be watched closely as it can significantly influence the direction of future financial assistance to Pakistan under increasing geopolitical and economic tensions.
