ISLAMABAD: The International Monetary Fund (IMF) has forecast a steady reduction in Pakistan’s debt and fiscal deficit over the next five years. The projections were shared in the IMF’s Fiscal Monitor Report 2025, highlighting signs of gradual fiscal improvement.
Debt-to-GDP Ratio Expected to Fall
According to the report, Pakistan’s debt-to-GDP ratio will decline from 71.6 percent this year to 71.3 percent next year. The IMF expects the ratio to fall further to 60.2 percent within five years, reflecting improved fiscal discipline and debt management.
Fiscal Deficit to Narrow Gradually
The fiscal deficit is projected to reach 4.1 percent of GDP this year, slightly above the 3.9 percent target. However, the IMF anticipates a progressive reduction in the deficit to 2.8 percent by 2030, supported by better revenue generation and spending control.
Primary Balance and Expenditure Trends
The primary balance is expected to reach 2.5 percent this year, slightly higher than the 2.4 percent target. Next year, the balance may narrow to 2 percent. Government expenditure will likely remain at 20.4 percent of GDP this year and fall to 19.6 percent in the next fiscal year.
Revenue-to-GDP Ratio Shows Positive Growth
Pakistan’s revenue-to-GDP ratio is projected to rise to 16.2 percent this year, up from 15.7 percent in the previous fiscal year. The IMF attributes this increase to stronger tax collection efforts and improved fiscal management.
Outlook Remains Cautiously Optimistic
Experts believe these projections reflect cautious optimism about Pakistan’s economic trajectory. However, sustained fiscal discipline and consistent reforms remain essential to achieving the IMF’s targets.
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