IMF is kind to poor Pakistan, bailout package even after breaking the conditions!

Pakistan has been stuck in one economic crisis after another for years and its dependence on the bailout packages of the International Monetary Fund (IMF) is continuously increasing. The surprising thing is that despite repeatedly violating the conditions of IMF, Pakistan has been continuously getting loans. Now Pakistan has moved towards its 25th IMF loan program.

Under the latest agreement, Pakistan has received an Extended Fund Facility (EFF) package of $7 billion for 37 months, as well as a Resilience and Sustainability Fund (RSF) of $1.4 billion. According to the staff-level agreement signed in October, Pakistan will receive $1 billion under the EFF and $200 million under the RSF. Thus, a total of $3.3 billion has been distributed so far under both the systems.

According to an article published in Asian Light newspaper, this financial help does provide temporary relief, but it also highlights Pakistan’s increasing dependence on external bailouts.

IMF programs aim to bring economic stability and discipline, but Pakistan has so far failed to implement long-term reforms.

The job of the IMF is not to micromanage domestic policies but to reduce fiscal deficit, increase revenues and rationalize subsidies. Despite this, Pakistan’s governments have been taking politically convenient but socially regressive decisions.

The result is that the burden on the salaried class and common consumers increased, while powerful sectors like agriculture, real estate and retail were kept out of the tax net. According to the report, only about 2 percent of people in Pakistan pay income tax, which shows serious inequality in the tax system.

An IMF report released in November 2025 highlighted the persistent problem of corruption in Pakistan and called for the immediate implementation of a 15-point reform agenda to increase transparency and accountability. IMF’s Governance and Corruption Diagnostic Assessment report said that Pakistan’s budget is not credible. Many projects, despite getting approval, do not get adequate funding for the entire tenure, leading to delays and huge cost overruns.

The National Assembly of Pakistan approved additional expenditure of Rs 9.4 trillion in the year 2024-25, which is five times more than the previous year. Constituency development funds under the direct control of MPs also influence capital investment and weaken monitoring, increasing the risk of misuse of public resources.

The IMF may insist on fiscal discipline, but the real problem is the lack of political will of Pakistan’s ruling class. Lavish expenditure by government institutions continues, subsidies are misdirected and remain the privileges of the elite. At the same time, pensioners are facing cuts and poor consumers are being burdened with fixed gas charges.

This inequality is clearly visible in the energy sector. Fixed charges have been implemented instead of consumption-based billing, which disproportionately impacts low-income households. The IMF talks about cost recovery, but the implementation of progressive tariffs and lifeline slabs is entirely in the hands of the Pakistan government.

Both the IMF and the Paris-based Financial Action Task Force (FATF) have stressed the need for data-based safeguards, anti-corruption guidelines and due diligence, but progress in implementing these recommendations has been extremely slow.