ISLAMABAD: The International Monetary Fund (IMF) has projected a significant increase of around Rs4.5 trillion in Pakistan’s domestic debt to reach Rs 63.966 trillion in the 2026-27 financial year against the projected Rs 59.404 trillion for the current fiscal year.
In its latest report, “second review under the Extended Fund Facility (EFF) and the first review of the Resilience and Sustainability Facility (RSF), the Fund noted that domestic debt as percentage of GDP is projected to reach 47.1 percent in the current fiscal year, which is projected to come down to 45.5 percent as percentage of GDP in next fiscal year.
The report further noted that external debt is projected to increase to USD130.704 billion in the next fiscal year, compared to the projected USD125.612 billion for the current fiscal year.
IMF projects Pakistan’s external debt to rise to $126.731bn by FY26
Pakistani authorities have committed to the Fund to improve liability management to mitigate debt vulnerabilities. Consistency in implementing the recently published 2026-28 Debt Management Strategy is critical for further extending maturities and reducing high exposure to short-term interest rates in the medium term.
The authorities further stated that, in line with its fiscal commitments, they have used the SBP dividend windfalls to retire domestic debt, including Rs 1,133 billion of PIBs held by the SBP.
Copyright Business Recorder, 2025
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