Pakistan

Pakistan’s total debt crossed $286 billion in the fiscal year 2025, reflecting mounting fiscal pressures, high borrowing requirements, and persistent trade deficits. Analysts attribute the surge to a combination of external loans, domestic borrowing, and currency depreciation. Rising debt servicing obligations are intensifying macroeconomic challenges, including inflation and currency volatility. The government is under pressure to implement structural reforms, enhance revenue collection, and attract foreign investment to stabilize public finances.

Pakistan is set to undergo a crucial International Monetary Fund (IMF) loan review, with approximately USD 7 billion in financial assistance hanging in the balance. The review, aimed at evaluating Pakistan’s fiscal and structural reforms, will determine the continuation of IMF support under the existing Extended Fund Facility (EFF). Analysts emphasize that timely approval is critical for Pakistan to stabilize its foreign exchange reserves, manage external debt obligations, and sustain macroeconomic stability.

Pakistan is poised for a pivotal International Monetary Fund (IMF) review, with USD 7 billion (approximately Rs. 6.3 trillion) in funding contingent on meeting fiscal, monetary, and structural reform targets. The review will assess Pakistan’s progress on budgetary consolidation, foreign exchange stability, and macroeconomic reforms aimed at reducing fiscal deficits and promoting sustainable growth. IMF approval is crucial to unlocking tranche disbursements, supporting foreign reserves, and maintaining investor confidence.