Pakistan Prime Minister (PM) Shehbaz Sharif approved a grant of 24 billion rupees ($86.25 million) on Monday for Pakistan-ruled Kashmir where there have been several days of violent protests over inflation.
A police officer was killed, and over 90 people were injured when thousands clashed with the police in the region over the weekend, according to local government official Shah Nawaz.
Most businesses and transport remained shut for the fifth consecutive day on Monday, he said.
An alliance of civil rights groups has been leading the campaign, demanding the government give the region a subsidy on electricity and wheat prices in the face of rising inflation.
A statement from Sharif’s office did not clarify how the grant would be used.
The protests are taking place simultaneously with an IMF mission’s visit to negotiate a new long-term loan with Islamabad, following the IMF’s warning that the downside risks to the Pakistani economy remain exceptionally high.
Inflation slowed down to 17.3% in April, below the government’s forecast, which expects more improvement in the country’s economic outlook in the coming months.
Inflation had risen as high as 38% in May last year.
The demonstrators, who started the rally on Thursday, have been gathering again since Sunday night in Dhirkot town in Poonch district, said deputy Inspector General of Police Shehryar Sikandar.
Dhirkot is about 80 km (50 miles) south of Muzaffarabad, the region’s capital city, which the protesters are threatening to march on if their demands are not met.
“They are in thousands,” Sikandar told Reuters. “We are just monitoring them and have no policy to enter into any kind of direct confrontation.”
Shaukat Nawaz Mir, a leader of the alliance, said the clashes started after the police used force against peaceful protesters.
($1 = 278.2500 Pakistani rupees)
With Inputs from Reuters
