Pakistan Pledges $7 Billion IMF Aid Deal Will Be Its Last

Men reach out to buy subsidized flour sacks from a truck in Karachi, Pakistan. (January 10, 2023). (Photo/Reuters)
Men reach out to buy subsidized flour sacks from a truck in Karachi, Pakistan. (January 10, 2023). (Photo/Reuters)
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Pakistan Pledges $7 Billion IMF Aid Deal Will Be Its Last

Men reach out to buy subsidized flour sacks from a truck in Karachi, Pakistan. (January 10, 2023). (Photo/Reuters)
Men reach out to buy subsidized flour sacks from a truck in Karachi, Pakistan. (January 10, 2023). (Photo/Reuters)

The International Monetary Fund has agreed to loan Pakistan $7 billion to bolster its faltering economy, with Islamabad pledging Saturday it would be the last time it relied on relief from the Washington-based lender.
The South Asian nation agreed to the deal -- its 24th IMF payout since 1958 -- in exchange for unpopular reforms, including widening its chronically low tax base, AFP said.
Pakistan last year came to the brink of default as the economy shriveled amid political chaos following catastrophic 2022 monsoon floods and decades of mismanagement, as well as a global economic downturn.
It was saved by last-minute loans from friendly countries, as well as an IMF rescue package, but its finances remain in dire straits, with high inflation and staggering public debts.
"This program should be considered the last program," Prime Minister Shehbaz Sharif told ministers and revenue officials in Islamabad. "We should tax those who are not being taxed."
- Dealing with a downturn -
Islamabad wrangled for months with IMF officials to unlock the new loan announced Friday, which will be paid out over three years subject to approval by the organization's Executive Board.
It came on condition of far-reaching reforms including hiking household bills to remedy a permanently crisis-stricken energy sector and uplifting pitiful tax takings.
In a nation of over 240 million people and where most jobs are in the informal sector, only 5.2 million filed income tax returns in 2022.
During the 2024-25 fiscal year that started at the beginning of July, the government aims to raise nearly $46 billion in taxes, a 40 percent increase from the previous year.
More unusual methods have seen the tax authority block 210,000 SIM cards of mobile users who have not filed tax returns in a bid to widen the revenue bracket.
Under the deal "revenue collections will be supported by simpler and fairer direct and indirect taxation including by bringing net income from the retail, export, and agriculture sectors properly into the tax system", IMF Pakistan Mission Chief Nathan Porter said in a statement.
Islamabad also aims to reduce its fiscal deficit by 1.5 percent to 5.9 percent in the coming year, heeding another key IMF demand.
The IMF said the loan and its conditions should allow Pakistan to "cement macroeconomic stability and create conditions for stronger, more inclusive and resilient growth".
But Pakistan's public debt remains huge at $242 billion, and servicing it will still swallow up half of the government's income in 2024, according to the IMF.
Analysts have criticized Islamabad's measures as surface-level reforms aimed at courting the IMF without addressing underlying problems.
 



Rubio Says US Could Engage in New Trade Deals after Tariffs Imposed

US Secretary of State Marco Rubio disembarks from his vehicle as he walks to board his airplane prior to departing Quebec City Jean Lesage International Airport in Quebec, Canada, Friday, March 14, 2025. (Saul Loeb, Pool Photo via AP)
US Secretary of State Marco Rubio disembarks from his vehicle as he walks to board his airplane prior to departing Quebec City Jean Lesage International Airport in Quebec, Canada, Friday, March 14, 2025. (Saul Loeb, Pool Photo via AP)
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Rubio Says US Could Engage in New Trade Deals after Tariffs Imposed

US Secretary of State Marco Rubio disembarks from his vehicle as he walks to board his airplane prior to departing Quebec City Jean Lesage International Airport in Quebec, Canada, Friday, March 14, 2025. (Saul Loeb, Pool Photo via AP)
US Secretary of State Marco Rubio disembarks from his vehicle as he walks to board his airplane prior to departing Quebec City Jean Lesage International Airport in Quebec, Canada, Friday, March 14, 2025. (Saul Loeb, Pool Photo via AP)

Once the United States has imposed tariffs on its major trading partners it could engage in bilateral talks with countries on new trade arrangements, Secretary of State Marco Rubio said on Sunday.

US President Donald Trump threatened on Thursday to slap a 200% tariff on wine, cognac and other alcohol imports from Europe, opening a new front in a global trade war that has roiled financial markets and raised recession fears.

Rubio said the United States would retaliate against nations that had imposed tariffs on it.

“This is global. It's not against Canada, it's not against Mexico, it's not against the EU, it's everybody,” he told the CBS show “Face the Nation.”

“And then, from that new baseline of fairness and reciprocity, we will engage - potentially - in bilateral negotiations with countries around the world on new trade arrangements that make sense for both sides,” he continued.

Rubio, who did not give details of what the new deals could look like, said the United States would “reset the baseline” to ensure it was treated fairly.

“We don't like the status quo. We are going to set a new status quo, and then we can negotiate something, if they (other nations) want to,” he said. “What we have now cannot continue.”