IMF approves $1 billion disbursement to Pakistan despite India’s warning over terror funding

The International Monetary Fund (IMF) on Friday approved the immediate disbursement of $1 billion to Pakistan under the ongoing Extended Fund Facility (EFF), drawing sharp opposition from India, which warned the funds could be misused to support state-sponsored cross-border terrorism.The approval came during a board meeting in Washington, where the IMF also reviewed a proposed $1.3 billion loan to Pakistan under its Resilience and Sustainability Facility (RSF). India registered a formal protest, citing Pakistan’s poor track record with IMF reforms and expressing fears of fund diversion. New Delhi abstained from the vote.“Rewarding continued sponsorship of cross-border terrorism sends a dangerous message,” the finance ministry said in a statement. “It exposes funding agencies and donors to reputational risks and undermines global values.”Pakistan’s Prime Minister Shehbaz Sharif welcomed the development, describing it as a “defeat of India’s high-handed tactics” and a sign of international confidence in Pakistan’s economic recovery. “Indian attempts to sabotage the IMF programme have failed,” the Pak’s PMO said, accusing India of plotting “a conspiracy to divert attention” through “unilateral aggression.”The new disbursement brings total IMF funding to Pakistan under the EFF to around $2 billion. The full $7 billion package, agreed in July last year, is structured over 39 months in seven instalments, contingent on successful reforms including tax restructuring, energy sector reforms, and pricing adjustments in utilities and industries.The IMF and Pakistan reached a staff-level agreement in March on the first biannual review, which included commitments such as the introduction of a carbon levy and tariff revisions.