The International Monetary Fund (IMF) has projected a decline in the government gross debt for Pakistan from 77.8 percent of the Gross Domestic Product (GDP) in 2022 to 71.1 percent in 2023.
However, the fiscal year 2022-23 projections for Pakistan are based on information available as of the end of August 2022 and do not include the impact of the recent floods.
According to the IMF report “Fiscal Monitor, Helping People Bounce Back”, the net debt for Pakistan is projected to decline from 71.5 percent of the GDP in 2022 to 66.1 percent in 2023.
The government revenue is projected at 12.4 percent of GDP for 2023 and 12.8 percent for 2024 against 12.1 percent during the same period of 2022.
The Fund has projected the government primary balance at 0.2 percent for 2023 against -3 percent in 2022. Further, the government’s overall balance is projected at -4.8 percent for 2023 against -7.8 percent in 2022.
The report has projected government expenditure at 17.2 percent of GDP in 2023 and 17 percent in 2024 compared to 19.9 percent in 2022.
According to the report the country’s debt to average maturity in 2022 is estimated at 29 percent of GDP. There would be a total financing need of about 30.3 percent of the GDP in 2022. The projected interest rate – growth differential 2022-27 is -7.1 percent.
The report projected the pre-pandemic overall balance 2012-19 at -5.8 percent. The projected overall balance for 2021-27 is projected at -4.8 percent. Nonresident holding of general government debt 2021 (percent of total) is projected at 33.5 percent.
The report noted that policymakers can integrate social registries updated with current information (for instance, Ingreso Familiar de Emergencia in Chile and the National Socio-Economic Registry in Pakistan) and make use of high-frequency household surveys, where available, to facilitate better targeting for new beneficiaries. Broad-based support to households’ incomes was necessary—at least at the onset of the pandemic. As economic conditions improved, the generosity of measures could have been scaled back faster.
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