On May 9, 2025, the International Monetary Fund (IMF) approved the first review of its $7 billion financial program with Pakistan, resulting in the disbursement of a $1 billion tranche. Pakistani Prime Minister Shehbaz Sharif expressed satisfaction with the decision, which brings total disbursements to $2 billion under the program. Additionally, the IMF executive board was set to discuss a new sustainability loan worth $1.3 billion spread over more than two years.

This development follows heightened tensions between Pakistan and India after a deadly terrorist incident in Indian Kashmir, which India linked to Pakistan and called for a review of IMF loans to its neighbor. Hostilities escalated with reported drone and artillery attacks, intensifying regional security concerns. Despite these tensions, the IMF approval indicates continued financial support for Pakistan amid the political and security challenges.

Source: Reuters