ISLAMABAD — Pakistan is showing signs of fiscal resilience as its debt-to-GDP ratio begins a downward trajectory, according to the International Monetary Fund’s (IMF) Fiscal Monitor Report released in October 2025. The report outlines a cautiously optimistic outlook for the country’s medium-term economic stability, driven by improved revenue collection, disciplined spending, and strategic debt management.
The IMF projects Pakistan’s public debt ratio to decline from 71.6% of GDP to 71.3% by the end of the current fiscal year. Over the next five years, this figure is expected to fall further to 60.2%, signaling a significant reduction in the government’s debt burden.
Despite a slight uptick in the fiscal deficit—4.1% of GDP this year versus the target of 3.9%—the Fund anticipates a gradual narrowing to 2.8% by 2030. The primary balance, which excludes interest payments and serves as a key indicator of fiscal health, is expected to improve to 2.5% of GDP this year, before moderating to 2% next year.
Government expenditure is forecasted at 20.4% of GDP for the current fiscal year, with a projected decline to 19.6% in the following year. Meanwhile, revenue collection is expected to strengthen, rising from 15.7% to 16.2% of GDP, reflecting enhanced fiscal capacity and reform momentum.
The IMF’s assessment underscores Pakistan’s commitment to fiscal consolidation and macroeconomic stability, positioning the country for a more sustainable economic future. These projections come amid broader global efforts to manage public debt and stimulate growth through efficient public spending.
