Islamabad: The International Monetary Fund (IMF) has emphasized the need for Pakistan to undertake tax reform, ensure greater contribution from the wealthy, and enhance transparency in public spending to strengthen its economy for a follow-up programme.
Managing Director Kristalina Georgieva stated at an event hosted by the Atlantic Council think tank that Pakistan is successfully completing its existing nine-month $3 billion stand-by arrangement (SBA) with the IMF. She noted that Pakistan’s economy is performing relatively better, with reserves being rebuilt.
Speaking ahead of the IMF-World Bank Spring meetings in Washington from April 13 to 21, Georgieva confirmed that Islamabad is in discussions for a follow-up programme to the SBA. However, she highlighted important issues that Pakistan must address, including tax base expansion, increased contribution from affluent sectors, improved direction of public spending, and enhanced transparency.
Georgieva emphasized the significance of resolving these issues, stating that Pakistan is turning to the IMF for a potential follow-up programme and is committed to continuing on this path. She noted the pending issues that Pakistan needs to address to bolster its economy.
A Pakistani delegation, including Federal Finance Minister Muhammad Aurangzeb, State Bank of Pakistan Governor Jameel Ahmad, Finance Secretary Imdad Ullah Bosal, and Economic Affairs Division Secretary Dr. Kazim Niaz, will be present in Washington for the meetings.
Last month, Pakistan and the IMF reached a staff-level agreement on the second and final review of the SBA, which, if approved by the IMF board later this month, would release around $1.1 billion to Islamabad.
Pakistan’s external financing requirements for the next fiscal year are estimated to exceed $25 billion, which the country plans to address with the support of multilateral and some bilateral creditors.
Both sides have discussed negotiating a longer-term bailout and continuing necessary policy reforms to reduce deficits, build up reserves, and manage increasing debt servicing.
Sources indicate that Aurangzeb is scheduled to meet with US Assistant Secretary of State for South Asia Donald Lu and the Deputy Under Secretary of Treasury during his visit to Washington.
Additionally, the federal finance minister briefed Prime Minister Shehbaz Sharif about his upcoming visit to the US and discussed scheduled meetings with the IMF, World Bank, and other institutions, as well as the overall economic situation of the country.
