By Staff Reporter
KARACHI: The head of the International Monetary Fund (IMF) on Wednesday urged Pakistan to collect more taxes from the wealthy and protect the poor as the country struggles to cope with a severe economic crisis despite a $3 billion bailout from the lender.
Kristalina Georgieva, the managing director of the IMF, made the remarks after meeting with Pakistan’s interim Prime Minister Anwaar-ul-Haq Kakar in New York, where they are attending the United Nations General Assembly.
“What we are asking in our program is that please collect more taxes from the wealthy and please protect the poor people of Pakistan,” she told a private TV in New York. “I do believe this is in line with what people in Pakistan would like to see for the country.”
Later in a post on X (formerly Twitter), the IMF chief said she had a good meeting with the Pakistani premier on the country’s economic prospects.
“We agreed on the vital need for strong policies to ensure stability, foster sustainable and inclusive growth, prioritize revenue collection, and protection for the most vulnerable in Pakistan,” Georgieva added.
PM Kakar also posted on X about the meeting.
He said he held a constructive dialogue with the Fund’s director that “emphasized extending our mutual commitment towards bolstering economic stability and growth in Pakistan”.
An official handout released by the Prime Minister’s Office said that Kakar expressed gratitude for the IMF’s approval of the standby agreement to support Pakistan’s economy.
It said the premier briefed Georgieva on the various measures taken by the government to “stabilize and revive the country’s economy”.
“The prime minister affirmed that these initiatives aim to create a stable and conducive environment for sustainable economic growth and investment. Additionally, a strong focus had been placed on protecting the vulnerable segments of society,” the PMO statement said.
It further said that the IMF chief “appreciated Pakistan’s concerted efforts in implementing policies and reforms to revive the economy”. She assured that the IMF remained committed to continued engagement with Pakistan, the statement added.
The IMF approved the $3 billion bailout funds under a stand-by arrangement (SBA) in July. The agreement helped Pakistan avoid default but came with tough conditions and fiscal reforms alongside a string of painful measures such as raising extra revenues, increasing energy prices, and a market-based exchange rate, which has already fueled inflation.
The consumer price index rose to a record 38.0 percent in May. Interest rates have also risen, and the rupee hit all-time lows. To make matters worse, Pakistan last week also announced a record rise in petrol and diesel prices, the second big increase in two weeks, while the inflation rate stayed above target at 27.4 percent in August.
Despite the larger-than-expected IMF bailout, the agreement stressed that Pakistan would have to continue to mobilize multilateral and bilateral financial support.
The needs $22 billion to fund its external payment obligations, including international debt servicing, in the financial year 2024.
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