On Wednesday the International Monetary Fund projected Pakistan’s fiscal position to remain under pressure during the current fiscal year with a budget and primary deficit at 7.1 percent and 1 percent of GDP respectively and debt levels staying elevated at 87.7 percent.
In one of its flagship publications – Fiscal Monitor – the IMF, however, forecast improving fiscal situation over the next few years. For example, it has an estimated fiscal deficit for next year (FY22) at 5.5pc and going further down to 3.9pc in FY23. On the longer horizon, the IMF put the country’s fiscal deficit at 2.9pc of GDP by 2026.
The IMF forecast Pakistan’s general government gross debt to peak at 87.7pc of GDP – the highest in history – by end of the current fiscal year and then start declining to 83.3pc and then gradually going down to 65.5pc by 2026.
The net debt-to-GDP ratio – after adjusting for repayments etc – was also estimated to hit a record 80.7pc in FY21 and then making a sharp reduction to 77.3pc in FY22 and 72.4pc in FY23. Net debt-to-GDP ratio is projected to keep falling to reach 61.6pc of GDP by 2026.