ISLAMABAD (Mudassar Ali Rana) – Pakistan’s debt-to-GDP ratio has begun to decline, according to the latest Fiscal Monitor Report released by the International Monetary Fund (IMF).
The report highlights a gradual improvement in the country’s key economic indicators, including revenue, expenditure, and fiscal balance.
The IMF projects Pakistan’s public debt ratio to ease from 71.6% of GDP to 71.3% by the end of the current fiscal year. Over the next five years, this ratio is expected to fall further to around 60.2%, indicating a steady reduction in the government’s debt burden.
In the report, the Fund warned that the fiscal deficit may widen slightly this year, reaching 4.1% of GDP compared to the target of 3.9%. Despite this short term increase, the deficit is forecast to gradually narrow to 2.8% of GDP over the next five years.
According to the report primary balance a key measure of fiscal health excluding interest payments is expected to improve slightly to 2.5% of GDP this year, compared to the earlier projection of 2.4%. For the next fiscal year, the primary balance may moderate to 2%, according to IMF estimates. Government expenditure is projected to account for 20.4% of GDP during the current fiscal year, with a likely decline to 19.6% next year.
Report shows revenue collection is expected to strengthen, reaching 16.2% of GDP this year, up from 15.7% in the previous fiscal year. IMF’s October 2025 Fiscal Monitor underscores cautious optimism for Pakistan’s medium term fiscal outlook, pointing to sustained efforts in fiscal consolidation, improved revenue generation, and better debt management.