The time for economic diplomacy and investment outreach has come to an end. With the International Monetary Fund standing over its shoulder, the Pakistan Muslim League-Nawaz must now present its first budget for this tenure. Already suffering from high inflation and a slow economy, Pakistanis are looking on with bated breath – how heavy will the tax burden be?

The government is stuck with an impossible choice. While it has steadied the economic ship and seems to be headed in the right direction with its plans for revenue collection reform and state-owned enterprises divestment, it still needs another substantial loan from the international lending body. Here, the IMF is demanding tough conditions, especially related to tax collection targets and the implementation of new taxes on sectors such as agriculture.

Pakistani policymakers are understandably worried; front-loading such heavy obligations will lead to public backlash. Farmers, already incensed at the caretaker government for importing wheat and drawing down procurement prices and quantities, have taken to the streets before. Onerous taxation will bring them out again, and many others will be happy to support them. Furthermore, increased taxation will contribute to the cost-of-living crisis that has not yet recovered from the last round of inflation.

What will the government do? Bite the bullet and agree with the IMF, or push back against such tough demands and seek a more gradual reform process? From the point of view of the average citizen, the latter option is the one that should be chosen. However, with the deficit as it is and the threat of default always around the corner, the government might not have much of a choice in this matter.

Regardless of whichever route the government takes, Pakistan should brace itself for another period of economic hardship.