In a major financial relief, the International Monetary Fund (IMF) on Friday approved an immediate disbursement of USD 1 billion to Pakistan as part of the ongoing Extended Fund Facility (EFF). The announcement was welcomed by Prime Minister Shehbaz Sharif, who hailed the decision as a testament to Pakistan’s improving economic health and resilience against regional pressure. The disbursement, bringing the total released amount to USD 2 billion, follows the successful completion of the first biannual review of a 39-month, USD 7 billion programme agreed upon last July. Pakistan has committed to reforms in taxation, energy pricing, and private sector development to ensure long-term macroeconomic stability and inclusive growth.

However, India strongly opposed the IMF’s lending programme during the executive board meeting, citing concerns over Pakistan’s historical misuse of international funds and the possibility of those resources being diverted to state-sponsored cross-border terrorism. According to New Delhi, the approval of such loans without stringent safeguards could damage the credibility of global financial institutions and send a dangerous signal to the international community. The Indian government also abstained from the crucial IMF vote and accused Pakistan of using global financial aid to fuel military escalation amid growing Indo-Pak hostilities.

Responding to India’s objections, the Pakistani Prime Minister’s Office issued a firm statement condemning India’s “high-handed tactics” and calling them an attempt to derail Pakistan’s economic progress. The PMO claimed that Pakistan is focused on economic recovery and reform, not conflict, and accused India of using military aggression as a tool to distract from Pakistan’s development. Islamabad also reassured the IMF and international stakeholders that its commitment to economic reform remains steadfast, highlighting improved indicators over the past 14 months as evidence of successful policy direction.