Govt aims to cut debt-to-GDP ratio to 61.5pc by 2028
- By Web Desk -
- Aug 19, 2025
ISLAMABAD: Pakistan has prepared a new debt roadmap in line with International Monetary Fund (IMF) targets, aiming to bring the country’s debt and interest payments under control by 2028, ARY News reported citing official documents.
According to the Finance Ministry, the size of public debt will be reduced to 61.5 percent of GDP by 2028, compared to the current 66 percent. The burden of interest payments will also be cut from 7.8 percent of GDP to 4.9 percent by 2028.
The Medium-Term Debt Strategy sets a goal to lower external debt to 18 percent by 2028, while the average maturity time for local loans has been set at 4.25 years.
The government’s projections show inflation at 7.5 percent this year, easing to 6.8 percent next year, and stabilizing at 6.5 percent in 2028.
GDP growth is expected to rise from 4.2 percent this year to 5.1 percent in the next fiscal year, reaching 5.7 percent by 2028.
The federal primary surplus is targeted at 1.3 percent of GDP this year and 1 percent in the following years, while the budget deficit is expected to shrink from 5 percent of GDP this year to 3.9 percent in 2028.
The documents also show that Pakistan’s total outstanding debt has climbed to Rs 78.7 trillion. The government plans to steadily reduce the debt-to-GDP ratio over the next three years.
Also Read: Pakistan plans to ‘extend’ loan repayment period to meet IMF condition
Earlier, in a move to fulfil another International Monetary Fund (IMF) requirement, the Pakistan government prepared a comprehensive strategy to extend the repayment period of both domestic and external loans.
According to officials, the plan aims to increase the average maturity period for domestic debt from the current 3 years and 8 months to 52 months, while the maturity period for external debt will be extended from the current 6.1 years to 76 months.
The IMF has set 2028 as the deadline for Pakistan to fully implement the new maturity targets.
Sources stated that extending the maturity period will help reduce financing requirements in the coming years.