Pakistan has engaged in more than 20 programs with the International Monetary Fund (IMF) since 1958. However, it continues to face recurring economic crises without achieving lasting structural reform. The IMF’s recent statement highlighted familiar priorities like fiscal consolidation, tight monetary policy, and energy sector reforms.
The statement also raised concerns about geopolitical tensions in West Asia, high energy prices, and global financial conditions. Despite efforts, Pakistan has not been able to sustain economic recovery beyond short-term stabilization. The country’s challenges include weak revenue mobilization, persistent fiscal deficits, and limited export growth.
Pakistan’s total public debt increased to Rs 79.32 trillion in January 2026, with domestic borrowing accounting for 71% of the total. The country faces significant external financing requirements while managing repayment obligations. Foreign exchange reserves are under pressure, with reliance on external support from partners like China and Saudi Arabia.
Government borrowing has led to a crowding out of private sector lending, with over 80% of bank credit going to the public sector. Pakistan’s debt-to-GDP ratio, estimated at around 75%, surpasses the legal threshold of 58%, indicating high sustainability risks.
