IMF chief praises Pakistani authorities for maintaining economic stability

Managing Director (MD) International Monetary Fund (IMF), Kristalina Georgieva lauded the Pakistani government for “maintaining economic stability and timely implementation of reforms”.

“Met with Caretaker Prime Minister Anwaar-ul-Haq Kakar at COP28,” Georgieva shared in a post on social media platform X, formerly known as Twitter, late Friday.

“We discussed commendable progress made by the government to maintain economic stability and timely implementation of planned reforms,” she added.

Caretaker PM on Friday held informal interactions with multiple world leaders, on the sidelines of the COP28 summit.

The interim prime minister also interacted with Georgieva on the occasion.

The remarks come as the South Asian country, which is operating under a caretaker government, remains in an IMF program.

In July, Pakistan inked a last-minute Stand-By Arrangement (SBA) with the Washington-based lender amid default fears. Under the $3 billion SBA program, Pakistan received $1.2 billion from the IMF as the first tranche in July.

The nine-month agreement then paved the way for inflows from multilateral and bilateral partners including Saudi Arabia, UAE, and World Bank, providing a cushion to the depleting foreign exchange reserves position.

The IMF programme also gave some breathing room to Pakistan’s economy that has been struggling with a boom-and-bust cycle for decades in the absence of meaningful structural reforms.

Last month, the IMF staff and Pakistani authorities reached a staff-level agreement on the first review of the SBA program. The government expects approval from the IMF’s executive board in December.

Weeks ago, the IMF chief, while talking to Bloomberg TV, praised the Pakistani authorities for pursuing the IMF program despite difficult circumstances.

“Pakistani authorities and the Caretaker Finance Minister deserve credit for sticking to the program they have in a very difficult time,” she said back then.

Georgieva termed lower tax collection a major issue of Pakistan, as the country’s tax-to-GDP ratio remains at 12%. “We are saying it has to be at least 15% to have the revenues to sustain the functioning of Pakistan,” she said while urging authorities to collect taxes that can pay them.