Pakistan’s IMF Bailouts: A 75-Year Cycle of Deep Dependency

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IMF Faces Major Backlash in India for Pakistan Bailout Amid Major Conflict

By S Jha

NEW DELHI, May 10, 2025 – Since joining the International Monetary Fund (IMF) in 1950, Pakistan has secured 25 bailout packages. The bloating IMF account book of Pakistan bailout packages total over $33.6 billion.

Pakistan, statistically, has one of the highest frequencies of IMF interventions for any nation.

In 1958, Pakistan secured the first IMF bailout of $25,000. Last year, Pakistan secured $7 billion Extended Fund Facility. Amid the ongoing India-Pakistan conflicts, the IMF approved part release of $2.3 billion of the package approved in September last year.

The IMF is facing a major backlash in India for blindsiding with Pakistan. The instant IMP payout of $1 billion is feared possibly for terror funding use by Pakistan.

India abstained from voting after forcefully opposing the release of the IMF package. IMF per norm decides on consensus with no scope for negative vote.

Jammu and Kashmir Chief Minister Omar Abdullah led the scorching condemnation of the IMF. “I’m not sure how the ‘International Community’ thinks tensions will de-escalate when the IMF essentially reimburses Pakistan for ordnance devastating Poonch, Rajouri, Uri, Tangdhar, and other areas,” Abdullah wrote on X.

China (6.08%) is the third-largest voting member of the IMF, behind the United States (16.49%) and Japan (6.14%). On the surface, it appears that the IMF refused to go back on an approved bailout package for Pakistan.

The 1958 IMF bailout set a precedent for recurring aid, with subsequent loans in 1965 ($37,500) and 1968 ($75,000) addressing balance-of-payments crises. The 1980s and 1990s saw structural adjustment programs mandating austerity and privatization. The largest loan, $7.6 billion in 2008. Pakistan withdrew only $4.9 billion.

In 2023 and 2024, $3 billion and $7 billion packages, respectively, aimed to avert default amid floods, inflation, and political unrest.

Steve Hanke, an economist, noted in 2023: “Pakistan has passed the begging bowl to the IMF a stunning 23 times since 1950. All this borrowing has done Pakistan little good. Since 2001, over 50% of its borrowing has been sucked out by Pakistani elites and squirreled away overseas.”

Shiva Makki, commenting on May 7, 2025, stated: “IMF has bailed out Pakistan 24 times, almost every three years since independence. Each bailout has gotten bigger. Pakistan’s debt-to-GDP ratio is nearly 70%. Yet, Pak spends huge sums on building terror infrastructure.”

Pakistan’s $130 billion external debt, with 22% owed to China under the China-Pakistan Economic Corridor, complicates its financial landscape. The IMF’s stringent conditions, including tax hikes and energy tariff reforms, have sparked domestic unrest, with inflation peaking at 38% in 2023.

Experts warn of a deepening debt trap for Pakistan. The IMF projects modest growth of 3.1% for 2025-26 for Pakistani economy. With Pakistan economy already in a state of major disruptions due to tensions with India, experts argue that Islamabad’s economic situations may only worsen.

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