Pakistan: IMF projects country's gross debt at 71.3% of GDP in 2022, hints at decline

Amid Pakistan’s continued debt crisis, the International Monetary Fund (IMF) has now projected a minor decline in the country’s gross debt. According to the IMF projections, the Pakistan government’s gross debt will decline from 74 per cent of Gross Domestic Product (GDP) in 2021 to an estimated 71.3 per cent of GDP in 2022. In its most recent assessment of Pakistan, the IMF had forecasted annual growth of 4 per cent, compared to 4.8 per cent estimated by the country's central bank.

According to the IMF report “Fiscal Monitor, Fiscal Policy from pandemic to war”, the Pakistan government’s gross debt has been projected to decline in the years to come. With the current projections, Pakistan’s debt is set to decline to 71.3 per cent in the current fiscal year as compared to 74 per cent in the fiscal year 2021. It is further projected to fall to 66.8 per cent in the upcoming financial year 2023 and to 61.7 per cent in 2023.

Inflation rate in Pakistan to rise to double digits: IMF

Meanwhile, the IMF report has projected government expenditure also to drop. According to the Fund, Pakistan’s government expenditure will stand at 18.4 per cent of the GDP in 2022 as compared to 18.6 per cent in 2021. Furthermore, it will drop to 17.1 per cent in 2023. It also noted that the country would have a total financing need of about 35.9 per cent of GDP in 2021.

Furthermore, the IMF has projected the inflation rate in the country at double digits rising to 11.2 per cent for the year 2022 as against 8.9 per cent in 2021. The report also projected consumer prices for the end of the period of 2023 at 10.5 per cent while the current account balance is projected at the negative 5.3 per cent for 2022. It is pertinent to note that the IMF in its most recent assessment of Pakistan, forecasted annual growth of 4 per cent. The country's central bank had earlier estimated a 4.8 per cent annual growth for the year.

Pakistan PM slams previous govt for mismanaging economy

Interestingly, in his first press conference after taking over, Pakistan Finance Minister Miftah Ismail claimed the IMF had presented a list of demands for the bailout package to be implemented again. Meanwhile, Pakistan Prime Minister Shehbaz Sharif claimed that the previous Pakistan Tehreek-i-Insaf (PTI) government mismanaged the economy, accusing former Prime Minister Imran Khan of borrowing loans to cover the country's defence spending. The Pakistani PM also stated that the country's economic position had worsened to the point where even defence spending had to be funded through loans.

(With ANI inputs)

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