IMF

In a notable shift from global economic policymaking to academia, Gita Gopinath has officially stepped down from her role as First Deputy Managing Director of the International Monetary Fund (IMF). The distinguished economist will be returning to Harvard University, where she previously held a tenured professorship. Gopinath’s departure marks the end of a transformative chapter at the IMF, where she played a pivotal role in guiding the global response to the COVID-19 pandemic and addressing complex macroeconomic challenges.

A recent World Bank study has revealed stark disparities in Pakistan’s fiscal system, highlighting the General Sales Tax (GST) as the single largest contributor to increased poverty. The study, titled The Effects of Taxes and Transfers on Inequality and Poverty in Pakistan, concludes that indirect taxation disproportionately burdens low-income households, with GST accounting for more than 7% of pre-tax household spending. In contrast, the Benazir Income Support Programme (BISP) emerged as the most impactful tool for reducing inequality.

The International Monetary Fund has approved a $1 billion disbursement to Pakistan following a successful review of the country’s adherence to its Extended Fund Facility (EFF) program. The funding, granted in early May 2025, was sanctioned after IMF officials confirmed that Pakistan had met all stipulated targets and conditions. Despite objections from India—concerned about potential misuse of the funds—the IMF clarified that the financing is earmarked strictly for balance-of-payments support and managed under stringent central bank controls.

The International Monetary Fund (IMF) has imposed 11 new stringent conditions on Pakistan as a prerequisite for releasing the next tranche of its bailout package, bringing the total conditions to 50. These include parliamentary approval of a Rs 17.6 trillion federal budget, adjustments in energy tariffs, and reforms in agriculture taxation and governance. The IMF also cautioned that escalating India-Pakistan tensions pose significant risks to Pakistan’s fiscal stability and reform agenda.

In a strategic move with significant geopolitical and financial implications, India has appointed Parameswaran Iyer, currently an Executive Director at the World Bank, as its nominee to the International Monetary Fund’s (IMF) Executive Board. This interim assignment follows the abrupt termination of K.V. Subramanian’s tenure—six months ahead of schedule—and comes just days before a pivotal IMF meeting on May 9. The board will vote on a new USD 1.3 billion climate resilience loan and review Pakistan’s USD 7 billion bailout.