IMF Projects Decline in PakistanÂ’s Gross Debt in FY23
The International Monetary Fund (IMF) estimated a decrease 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.
But, the FY 2022-23 estimations for Pakistan are based on data available from the end of August 2022 and do not involve the effects of the recent floods.
As per the IMF report “Fiscal Monitor, Helping People Bounce Back”, the overall debt for Pakistan is likely to decline from 71.5 percent of the GDP in 2022 to 66.1 percent in 2023.
While the government revenue is expected at 12.4 percent of GDP for 2023 and 12.8 percent for 2024 as compared to 12.1 percent during the same period of 2022.
IMF further projected the government primary balance at 0.2 percent for 2023 compared to -3 percent in 2022. In addition, the governmentÂ’s overall balance is projected at -4.8 percent for 2023 compared to -7.8 percent in 2022.
Government expenditure is projected at 17.2 percent of GDP in 2023 and 17 percent in 2024 compared to 19.9 percent in 2022, the report said.
Moreover, the countryÂ’s debt to average maturity in 2022 is projected at 29 percent of GDP. A total financing need of nearly 30.3 percent of the GDP is projected in 2022, whereas the projected interest rate growth differential 2022-27 is -7.1 percent.
The report also highlighted and projected the pre-pandemic overall balance 2012-19 at -5.8 percent. The estimated overall balance for 2021-27 is projected at -4.8 percent, while nonresident holding of general government debt in 2021 has been projected at 33.5 percent.
The policymakers can incorporate social registries updated with existing information (like the National Socio-Economic Registry in Pakistan and Ingreso Familiar de Emergencia in Chile) and make use of high-frequency household surveys, where available, in order to support better targeting for new beneficiaries, the report maintained.