IMF Forecasts Rise in Pakistan’s Government Expenditure and Debt

ISLAMABAD: The International Monetary Fund (IMF) anticipates a notable surge of 2.2 percent in Pakistan’s government spending, escalating from 19.4 percent of gross domestic product (GDP) in 2024 to 21.6 percent in 2025.

According to the IMF’s “Fiscal Monitor, Fiscal Policy under Uncertainty” report, Pakistan’s gross government debt is projected to climb from 70.1 percent of GDP in 2024 to 73.6 percent in 2025.

The IMF also forecasts an increase in Pakistan’s net debt, from 64.3 percent of GDP in 2024 to 67.5 percent in 2025.

Government revenue is estimated to reach 15.9 percent of GDP for 2025 and 15.2 percent for 2026, compared to 12.6 percent in 2024.

The IMF projects the government’s primary balance at 2.1 percent for 2025, up from one percent in 2024.

Furthermore, the government’s overall balance is projected at -5.6 percent for 2025, an improvement from -6.8 percent in 2024.

The report indicates that the nation’s debt to average maturity in 2025 is predicted to be 15.9 percent of GDP. The interest rate – growth differential for 2025-30 is estimated at -1.4 percent, while the nonresident holding of general government debt for 2024 is projected at 31.5 percent of the total.