IMF projects 2.2% rise in Pakistan’s govt expenditure, debt to reach 73.6% of GDP in FY2025

The International Monetary Fund (IMF) has projected a notable increase in Pakistan’s government expenditure and debt for the fiscal year 2025. 

According to the IMF's latest report, Fiscal Monitor: Fiscal Policy under Uncertainty, the government’s expenditure as a percentage of Gross Domestic Product (GDP) is expected to rise from 19.4% in 2024 to 21.6% in 2025.

The IMF report also highlights an increase in Pakistan’s government gross debt, which is projected to grow from 70.1% of GDP in 2024 to 73.6% in 2025. Similarly, net debt is expected to rise from 64.3% of GDP in 2024 to 67.5% in 2025.

On the revenue front, the IMF estimates that Pakistan’s government revenue will reach 15.9% of GDP in 2025, up from 12.6% in 2024. The revenue is expected to continue improving, reaching 15.2% of GDP in 2026.

The IMF also projects a government primary balance of 2.1% of GDP for 2025, up from 1% in 2024. However, the overall government balance is expected to remain negative, with a projection of -5.6% of GDP for 2025, improving slightly from -6.8% in 2024.

Additionally, the IMF estimates the country’s debt-to-average maturity in 2025 to be 15.9% of GDP, with the projected interest rate-growth differential for 2025-30 at -1.4%. Nonresident holdings of Pakistan’s general government debt are expected to account for 31.5% of the total in 2024.