Skip to main content

Pakistan’s debt pile to swell to 84.1% of GDP by 2023

By shahbaz rana


It will be far higher than the debt level at the end of PML-N’s tenure

ISLAMABAD: The debt pile that Prime Minister Imran Khan would leave behind at the end of his five-year term will be equal to 84.1% of the size of Pakistan’s economy – far higher than the gross public debt at the end of the PML-N government, suggests a new report of the International Monetary Fund (IMF).

The report, released on Wednesday from Washington, puts PM Imran’s claim of reducing the country’s debt to test. In its annual flagship report “Fiscal Monitor – Curbing Corruption”, the IMF has shown the public debt-to-GDP ratio at 84.1% of gross domestic product (GDP) by 2023, higher by 12 percentage points than the level left behind by the PML-N government.

The report also says that Pakistan’s total financing needs have shot up alarmingly to 42.3% of the size of its economy, or Rs16 trillion, due to maturing debt and yawning budget deficit – a trend that will further worsen in the next fiscal year.

The IMF has released Pakistan’s fiscal indicators for the next five years, which portray that the country will sink deeper into debt. The IMF has given these indicators in terms of GDP that The Express Tribune has translated into rupees by using the projected size of the economy in fiscal year 2018-19 ending June 30 and fiscal year 2019-20.

At the end of the PML-N’s term, Pakistan’s gross public debt was equal to 72.1% of GDP, which the IMF said would increase to 77% at the end of current fiscal year. By fiscal year 2019-20, the debt-to-GDP ratio would be 79.1% and it would gradually swell to 84.1% of GDP, stated the report.

Last week, Finance Minister Asad Umar said Pakistan’s gross public debt would remain at 70% of GDP by 2023 as no sharp reduction was possible. But the IMF projections were significantly higher than what Umar planned to do.

Under the Fiscal Responsibility and Debt Limitation Act, Pakistan’s debt should not be more than 60% of GDP.

According to the report, Pakistan’s budget deficit – the gap between expenditures and revenues – will widen to 7.2% of GDP or Rs2.8 trillion in the current fiscal year.

IMF’s projected budget deficit is Rs550 billion, or 1.6% of GDP, higher than what the finance ministry has estimated in its revised budget. This paints quite an alarming picture, suggesting that the PTI government will not only miss its first year’s budget deficit target but would also borrow more than its estimates.

During the current fiscal year, the public debt, equal to 35.1% of GDP, will mature, said the IMF. This will be equal to Rs13.4 trillion. On the basis of budget deficit and maturing debt, the IMF has estimated total financing needs at Rs16 trillion or 42.3% of GDP for this financial year, FY19.

Times are tough but economy will improve: Asad Umar

Majority of the financing needs are related to maturing domestic debt that the government meets by getting

these loans rolled over.

For next fiscal year 2019-20, the IMF has estimated that Pakistan’s total financing needs would surge to 46% of GDP or Rs19.3 trillion. The international lender has estimated budget deficit at 8.7% of GDP or nearly Rs3.7 trillion. The debt maturity has been estimated at Rs15.6 trillion or 37.2% of GDP, according to the report.

The IMF has not shown any improvement in the fiscal indicators till 2023-24. It has shown the budget deficit at 7.6% of GDP by 2023 and 7.7% by 2024. These assumptions are based on the premise that the revenues would remain below 15% of GDP in the next five years – even lower than 15.3%, the level left behind by the PML-N.

The IMF has estimated that expenditures would remain over 22.3% of GDP in the next five years, higher than the level at the end of last fiscal year.

The IMF has also shown the primary deficit for next five years, which is calculated by excluding interest payments. In its programme negotiations, the lender has been pushing Pakistan to show primary balance that can only be achieved by either cutting the development budget or the defence spending.

In its projections, IMF has shown the primary deficit over 2% of GDP for the next five year. But in its economic roadmap, the Ministry of Finance has shown the primary balance in the range of 0.8% of GDP to 2% of GDP. The ministry has shown the primary balance on the back of a steep increase in the revenue, which the IMF is not recognising.


The fiscal monitor’s report states that a common element of many anticorruption reforms is increasing civil servants’ wages. In theory, this helps by reducing the need for civil servants to request bribes to complement very low wages and deterring corrupt activities by raising the cost of being caught.

However, there is insufficient evidence that raising wages by itself can play a prominent role in fighting corruption. “On performance-related incentives, an experiment in Pakistan also shows the potential for undesirable consequences: while performance-based salaries of tax officials led to a significant increase in tax collection by as much as 50%, bribe requests also increased by 30%,”added the IMF report. 

Published in The Express Tribune, April 11th, 2019.


Popular posts from this blog

SSG Commando Muddassir Iqbal of Pakistan Army

“ Commando Muddassir Iqbal was part of the team who conducted Army Public School operation on 16 December 2014. In this video he reveals that he along with other commandos was ordered to kill the innocent children inside school, when asked why should they kill children after killing all the terrorist he was told that it would be a chance to defame Taliban and get nation on the side. He and all other commandos killed children and later Taliban was blamed. Muddassir Iqbal has deserted the military and now he is  with mujahedeen somewhere in AF PAK border area” For authenticity of  this tape journalists can easy reach to his home town to interview his family members or   ISPR as he reveals his army service number” Asalam o Alaikum: My name is Muddassir Iqbal. My father’s name is Naimat Ali. I belong to Sialkot divison (Punjab province), my village is Shamsher Poor and district, tehsil and post office  Narowal. Unfortunately I was working in Pakistan army. I feel embarrassed to tell yo

CPEC Jobs in Pakistan, salary details

JOBS...نوکریاں چائنہ کمپنی میں Please help the deserving persons... Salary: Salary package in China–Pakistan Economic Corridor (CPEC) in these 300,000 jobs shall be on daily wages. The details of the daily wages are as follows; Welder: Rs. 1,700 daily Heavy Duty Driver: Rs. 1,700 daily Mason: Rs. 1,500 daily Helper: Rs. 850 daily Electrician: Rs. 1,700 daily Surveyor: Rs. 2,500 daily Security Guard: Rs. 1,600 daily Bulldozer operator: Rs. 2,200 daily Concrete mixer machine operator: Rs. 2,000 daily Roller operator: Rs. 2,000 daily Steel fixer: Rs. 2,200 daily Iron Shuttering fixer: Rs. 1,800 daily Account clerk: Rs. 2,200 daily Carpenter: Rs. 1,700 daily Light duty driver: Rs. 1,700 daily Labour: Rs. 900 daily Para Engine mechanic: Rs. 1,700 daily Pipe fitter: Rs. 1,700 daily Storekeeper: Rs. 1,700 daily Office boy: Rs. 1,200 daily Excavator operator: Rs. 2,200 daily Shovel operator: Rs. 2,200 daily Computer operator: Rs. 2,200 daily Security Supervisor: Rs.

A ‘European Silk Road’

publication_icon Philipp Heimberger ,  Mario Holzner and Artem Kochnev wiiw Research Report No. 430, August 2018  43 pages including 10 Tables and 17 Figures FREE DOWNLOAD The German version can be found  here . In this study we argue for a ‘Big Push’ in infrastructure investments in greater Europe. We propose the building of a European Silk Road, which connects the industrial centres in the west with the populous, but less developed regions in the east of the continent and thereby is meant to generate more growth and employment in the short term as well as in the medium and long term. After its completion, the European Silk Road would extend overland around 11,000 kilometres on a northern route from Lisbon to Uralsk on the Russian-Kazakh border and on a southern route from Milan to Volgograd and Baku. Central parts are the route from Lyon to Moscow in the north and from Milan to Constanţa in the south. The southern route would link Central Europe with the Black Sea area and