The Managing Director (MD) of the International Monetary Fund (IMF), Kristalina Georgieva, expressed her appreciation for the Pakistani government’s commitment to maintaining economic stability and implementing reforms in a post on the social media platform X (formerly known as Twitter). She had an informal meeting with Caretaker Prime Minister Anwaar-ul-Haq Kakar during the COP28 summit, where they discussed the significant progress made by the government in sustaining economic stability and ensuring the timely execution of planned reforms.
The Caretaker Prime Minister had informal interactions with several world leaders on the sidelines of the COP28 summit, including Georgieva. These remarks come at a time when Pakistan, under a caretaker government, continues to be part of an IMF program.
In July, Pakistan entered into a Stand-By Arrangement (SBA) with the IMF as a last-minute measure to address concerns of default. Under this $3 billion program, Pakistan received an initial tranche of $1.2 billion from the IMF in July. This nine-month agreement also opened doors for financial support from multilateral and bilateral partners such as Saudi Arabia, the UAE, and the World Bank, helping bolster the country’s dwindling foreign exchange reserves.
The IMF program provided some relief to Pakistan’s economy, which has faced a cycle of economic ups and downs for decades due to the absence of substantial structural reforms. Recently, the IMF staff and Pakistani authorities reached a staff-level agreement on the first review of the SBA program, with the government anticipating approval from the IMF’s executive board in December.
In a previous interview with Bloomberg TV, the IMF Chief commended the Pakistani authorities for their commitment to the IMF program despite challenging circumstances, acknowledging the efforts of Pakistani authorities and the Caretaker Finance Minister for adhering to the program during difficult times.
Georgieva also highlighted Pakistan’s lower tax collection as a significant issue, with the country’s tax-to-GDP ratio standing at 12%, emphasizing the need to increase it to at least 15% to generate sufficient revenues to sustain Pakistan’s operations. She urged the authorities to improve tax collection to meet their financial obligations.