A few days later, there are setbacks. The conditions came when it was desperate for water. Pakistan has suffered a big setback after Operation Sindoor. The International Monetary Fund (IMF) has taken a step that could put impoverished Pakistan in big trouble. The IMF has imposed 11 new conditions on Pakistan for the continuation of the next tranche of its bailout program. It has warned that the stimulus package with India could increase the risks to the economic, external and reform goals.
Among the 11 conditions set by the IMF for Pakistan are the approval of a new budget of 17.6 trillion Pakistani rupees by the parliament, an increase in debt service surcharge on electricity bills and a ban on the import of cars older than three years. Pakistani media has reported this.
The IMF staff report released yesterday said that if tensions between India and Pakistan persist or worsen, risks to the program’s fiscal and external objectives could increase. It added that tensions between Pakistan and India have increased significantly in the past two weeks, but market reactions have been muted.
The stock market has maintained its recent gains and spreads have widened slightly. The IMF report has projected Pakistan’s defense budget for the next fiscal year at Rs 2.4 trillion, a 12 percent increase.