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ISLAMABAD: Pakistan’s external debt to reach $140.959 billion in fiscal year 2022-23 up from $130.127 billion in 2021-22, the International Monetary Fund (IMF) has projected in its report.
The report said that Pakistan’s public debt continues to be judged as sustainable with strong policies and robust growth, but with greater uncertainty, in part because the fiscal relaxation in fiscal year 2022 second half (H2) prevented the debt ratio reduction projected at the time of the sixth review.
The IMF estimated Pakistan’s domestic debt to be Rs31.085 trillion for 2022–2023 and Rs33.540 trillion for 2023–2024 in its reports for the seventh and eighth reviews under the extended arrangement under the extended fund facility, requests for waivers of non–observance of performance criteria, and extensions, augmentations, and re-phasing of access.
Assuming the adjustment efforts within the context of the EFF program are fully carried out, the debt-to-GDP ratio is now projected to rise from 77.9 percent at the end of the fiscal year 2021 to 78.9 percent at the end of the fiscal year 2022 before falling to roughly 60 percent by the end of the fiscal year 2027.
According to the report, there will be higher interest rates, a larger-than-expected growth slowdown as a result of policy tightening, pressure on the exchange rate, new policy reversals, slower medium-term growth, and significant risks to the debt sustainability from contingent liabilities related to SOEs.
