In light of a significant surge in inflation, which rose to 27.4% in August, and public unrest due to high electricity bills, IMF’s Managing Director, Kristalina Georgieva, advised Pakistan to impose higher taxes on the affluent while safeguarding the underprivileged. This discussion followed Pakistan’s last-minute bailout in July. Georgieva expressed her views during her conversation with caretaker Prime Minister Anwaarul Haq Kakar at the United Nations General Assembly. Echoing her sentiments on X (previously Twitter), she emphasized the importance of sound policies for the vulnerable’s stability, growth, and protection. PM Kakar highlighted their mutual commitment to economic stability.
On July 12, the IMF approved a $3 billion bailout for Pakistan, with an immediate release of $1.2 billion. This followed a Standby Arrangement in June to address the nation’s financial distress. This approval came from Saudi Arabia and UAE’s contributions, amounting to $3 billion combined, bolstering Pakistan’s foreign reserves. This new funding, higher than anticipated, follows the expiration of a $6.5bn bailout package in June.