The IMF has described Pakistan’s ability to repay its external debt as fragile. According to their estimates, the country’s external financing needs could reach $62.6 billion over the next three years under the Extended Fund Facility (EFF) program. Over a longer period, from 2024 to 2029, these needs could rise to $110.5 billion.
For the current fiscal year, Pakistan’s financing needs are projected to be $18.813 billion. This amount is expected to increase, reaching $23.714 billion by the fiscal year 2026-27.
The IMF has raised concerns about Pakistan’s high public debt, low foreign reserves, and political instability, which could make it harder for the country to repay its debt. These factors pose significant risks to the country’s repayment capacity.
However, there is a positive development as the IMF expects Pakistan’s gross financing needs for the fiscal year 2024-25 to reduce to $18.8 billion, which is seen as a hopeful sign for the country’s financial outlook.
Despite the challenges, this decrease in future financing requirements could give Pakistan some breathing room as it navigates its debt and economic issues.
