IMF has expressed concerns over Pakistan’s ability to handle its debt amidst its economic challenges. The statement follows the arrival of an IMF support team in Pakistan to discuss a potential bailout package.
According to the IMF’s recent staff report, Pakistan’s debt repayment capability faces significant risks, heavily reliant on policy implementation and external financial support.
The report highlights various risks, including delayed reforms adoption, high public debt, low reserves, and geopolitical instability, all of which could hamper policy execution and debt sustainability.
The IMF emphasizes the importance of robust policy implementation and external asset accumulation to restore external viability and ensure debt repayment capacity.
Additionally, it notes Pakistan’s need for substantial financing over the next five years, with estimates reaching $123 billion, including $21 billion in fiscal year 2024-25 and increasing amounts in subsequent years.
