IMF projects gradual decline in Pakistan’s debt-to-GDP ratio in new report
- By Web Desk -
- Oct 15, 2025
ISLAMABAD: The International Monetary Fund (IMF) has released its Fiscal Monitor Report 2025, presenting updated data on Pakistan’s fiscal deficit, revenue, expenditures, and public debt indicators, ARY News reported.
According to the report, Pakistan’s public debt-to-GDP ratio is expected to decline gradually, falling from 71.6 percent in 2024 to 71.3 percent this year. Over the next five years, the ratio is projected to decrease further to 60.2 percent.
However, the IMF noted that Pakistan’s fiscal deficit is likely to rise in the current financial year, reaching 4.1 percent of GDP, slightly above the target of 3.9 percent. The deficit is expected to narrow gradually to 2.8 percent over the next five years.
The Fund projected Pakistan’s primary balance to improve to 2.5 percent of GDP this year, exceeding the target of 2.4 percent, but said it could moderate to 2 percent in the next fiscal year.
Government expenditures are forecast to remain around 20.4 percent of GDP this fiscal year and decline to 19.6 percent next year. Meanwhile, Pakistan’s total revenue-to-GDP ratio is expected to increase to 16.2 percent from 15.7 percent recorded in the previous fiscal year.
The IMF said the projections reflect efforts to strengthen fiscal discipline and improve debt sustainability under ongoing reform measures.
Also Read: IMF issues World Economic Outlook highlighting Pakistan’s economic trends
On October 14, the International Monetary Fund (IMF) released its World Economic Outlook report, projecting steady economic recovery and moderate inflation for Pakistan in the ongoing fiscal year.
According to the IMF report, Pakistan’s GDP growth rate is expected to reach 3.6 percent in 2025, compared to 2.7 percent recorded in the previous fiscal year, reflecting signs of gradual stabilization in the country’s economy.
The IMF further estimated that unemployment in Pakistan will decline from 8 percent last year to 7.5 percent in the current fiscal year, suggesting a modest improvement in job creation.
Meanwhile, inflation in Pakistan is expected to remain around 6 percent, slightly higher than 4.5 percent in the previous fiscal year, according to the IMF. The report also projects the current account deficit to stay contained at 0.4% of GDP, signaling a relatively balanced external sector.