IMF Sees Slight Rise in Government Expenditure for Pakistan: A Fiscal Perspective

In recent reports, the International Monetary Fund (IMF) has projected a slight increase in government expenditure for Pakistan, providing key insights into the country’s fiscal landscape.IMF’s findings and their implications for Pakistan’s economy, shedding light on changes in government debt, revenue, and primary balance.

IMF’s Projections

The IMF’s latest “Fiscal Monitor” report presents a promising outlook for Pakistan’s fiscal health. It anticipates that government expenditure will rise by 0.6%, increasing from 19.5% of the Gross Domestic Product (GDP) in 2023 to 20.1% in 2024. This projected uptick in government spending suggests a commitment to economic development and public welfare.

Reducing Debt Burden

One of the most significant findings is the decrease in government gross debt, which is expected to decline from 76.6% of GDP in 2023 to 72.2% in 2024. This reduction indicates the government’s efforts to manage its debt responsibly, potentially relieving some financial burden in the coming years.

Improved Debt Metrics

IMF’s projections also highlight a decrease in net debt from 71.6% of GDP in 2023 to 68.3% in 2024. This trend suggests that Pakistan is on a path toward a healthier fiscal position, which can have a positive impact on its economic stability.

Government Revenue

In terms of government revenue, the IMF predicts an increase to 12.5% of GDP for 2024, compared to 12.4% for 2025. This is a significant improvement from 11.4% during the same period of 2023 and 12.1% in 2022. The enhanced revenue collection can be attributed to improved economic activities and tax reforms.

Primary Balance

The IMF has projected the government’s primary balance at 0.4% for 2024, a significant improvement compared to -1.2% in 2023. This is a critical indicator of fiscal health, showing the government’s ability to manage its finances efficiently.

Divergent Projections

It’s important to note that the World Bank’s projections for Pakistan’s primary balance differ from the IMF’s. The World Bank expects a negative 0.4% for the current fiscal year 2023-24, while the IMF foresees a 0.4% surplus. These discrepancies can be attributed to variations in data sources and methodologies.

Overall Balance

The government’s overall balance, which represents the difference between revenue and expenditure, is expected to improve in 2024, with a projected -7.6% compared to -8.1% in 2023. This indicates a positive trajectory for the country’s fiscal condition.

Debt Metrics

The report also includes data on Pakistan’s debt metrics, stating that the country’s debt-to-average-maturity in 2023 is estimated at 33.8% of GDP. Additionally, the projected gross financing need for 2023 is approximately 23.7% of GDP. Gross financing need combines the projected overall balance and maturing government debt.

Interest Rates and Non-Resident Holdings

The IMF’s report provides insights into interest rates and non-resident holdings of Pakistan’s general government debt. It indicates a projected interest rate – growth differential for the period 2023-28 at -6.1%. Moreover, the non-resident holding of general government debt in 2022 is projected to be 29.5% of the total, which showcases international investor confidence in Pakistan’s economy.


The IMF’s positive projections for Pakistan’s fiscal performance in the coming years indicate a resilient economy with improving debt metrics, increased revenue, and a more favorable primary balance. However, it is essential for policymakers to address discrepancies in data projections and work towards sustainable economic growth.