The government’s chest-thumping over a 100-billion-rupee spike in income tax this year hides a grim truth: it’s been squeezed out of salaried workers, whose shrinking paychecks are driving poverty deeper into Pakistan’s fabric. The ripple effects could ignite a chaotic, people-driven uproar—not some polished political campaign, but a raw cry from those fed up. Meanwhile, the dream of foreign cash flooding in to save the day remains just that—a dream—leaving the economy teetering as reforms stall and global dynamics shift.

Next month, the International Monetary Fund (IMF) team is set to kick off the initial review of Pakistan’s massive $7 billion, 37-month Extended Fund Facility program. Their task? To dig into how well Pakistan has stuck to the strict deadlines and structural changes laid out in the deal. Naturally, this has sparked a wave of chatter across the country—everyone’s wondering whether politics or economics will tip the scales for this mission’s outcome. Opposition figures and independent economists alike are fueling the debate with their ongoing commentary.

Looking back, Pakistan’s recent dance with the IMF—through the 2019 Extended Fund Facility, the 2023 Stand-By Arrangement, and now this latest EFF greenlit in Q3 2024—has revealed a trio of nagging issues. For starters, slipping up on a key structural target or a time-sensitive goal could derail everything. If the IMF team doesn’t sign off on a staff-level agreement, the next chunk of funding gets held up. That’s a domino effect waiting to happen: no tranche means no rollovers from Pakistan’s trusty trio—China, Saudi Arabia, and the UAE—who’ve been propping up the reserves with as much as $16 billion. Those rollovers, alongside multilateral aid, are the lifeline keeping the rupee from tanking against the dollar.

Sure, the current account is boasting a surplus, but don’t get too excited. That’s mostly thanks to a temporary ban on rice exports from India, which has been lifted now, and Bangladesh’s export woes during its political chaos, which has settled now. Meanwhile, imports are still being choked by red tape. Remittances are climbing, no question, but not enough to ease those restrictions—or to cover fuel imports for power plants or profit repatriation. That last bit has Chinese investors fuming; they can’t secure Sinosure insurance, a must-have for overseas ventures, and it’s souring their mood.

Then there’s the second headache: the government’s promise to make consumers foot the full bill for costs. It’s a tactic past administrations leaned on, but it’s losing steam fast. With poverty spiking to 44%—worse than Sub-Saharan Africa—and 93% of private-sector workers seeing their real income shrink by 20-25%, it’s a tough sell politically and economically. Meanwhile, the 7% on the public payroll got a 20-25% raise this year, funded by taxpayers, even though the government’s budget is stretched razor-thin. Balancing those realities is proving trickier than ever.

The government’s been touting a hefty 100-billion-rupee boost in income tax haul over the first seven months of this year, but there’s a catch—it’s come from jacking up taxes on salaried workers. That’s left their paychecks slimmer, pushing more families toward the poverty line and stirring up unease across Pakistan. If this keeps up, we might see a messy, grassroots backlash—less orchestrated by politicians and more a raw outburst of frustration.

On top of that, there’s a third snag: Pakistan’s banking big-time on foreign direct investment (FDI) to jolt the economy awake. Sure, they’ve inked a stack of Memoranda of Understanding with heavyweights like Saudi Arabia and the UAE, but nothing’s set in stone—no binding deals, no cash flowing. FDI trickled in at a measly $1.329 billion from July to December 2024. That’s a 19.9% bump from the same stretch last year, but it’s peanuts next to India’s $29.79 billion (April-September) or China’s staggering $747 billion (first 11 months of 2024). Worse, it’s a 32.5% drop from December 2023’s $252 million to just $170 million in December 2025. India and China didn’t luck into those numbers—they built business-friendly vibes first, something Pakistan’s yet to crack.

The economy’s juggling a laundry list of woes, and promised shake-ups in the power sector and tax system are still gathering dust. With the world splitting into new power blocs, leaning solely on Western goodwill to clinch IMF deals—and unlock other funds to tackle external debt—Isn’t cutting it anymore. Interest and repayments are looming, and the clock’s ticking.

Reforms aren’t just a donor checkbox; they’ve got to resonate with everyday people too. A quick fix? Slash the government’s bloated spending. That could dial back the scramble to hit this year’s 40% revenue hike target and calm some nerves on the street. The administration’s talking a big game on governance tweaks, but until those plans turn into action—and start paying off—the elite’s grip on resources needs to loosen. Otherwise, it’s all just noise.

Pakistan’s economic tightrope walk demands more than hopeful pledges—it needs real, tangible change. Trimming the government’s runaway spending could ease the desperate revenue chase and buy some public goodwill in the short term. Yes, the administration’s dangling governance reforms are like a shiny carrot, but until those roots take hold and bear fruit, the elite’s stranglehold on resources has to go. Without that shift, the clock keeps ticking on a system stretched too thin, with a restless nation watching.