ISLAMABAD: The International Monetary Fund (IMF) has projected Pakistan’s external debt to reach $138.568 billion in 2022-23 up from $129.574 billion in 2021-22.

The IMF in its report “2021 article IV consultation, sixth review under the extended arrangement under the extended fund facility, and requests for waivers of applicability and non-observance of performance criteria and re-phasing of access” has projected Pakistan’s public debt at 86.7 percent of GDP for 2021-22 compared to 88.2 percent for 2020-21.

The country’s domestic debt has been projected at Rs28.244 trillion for 2021-22 and Rs29.901 trillion for 2022-23.

The report noted that over the near-term horizon of the debt sustainability analysis (DSA) public debt levels are lower than projected at the time of the second-fifth reviews in March 2021, and they continue to be on a clear downward path.

This owes mainly to (i) an upward revision to fiscal year 2021 real growth from 1.5 percent to 3.9 percent, and (ii) a stronger exchange rate path (around 7.5 percent revision at end-fiscal year 2021).

Total debt is estimated at 88.6 percent of GDP at end-June 2021 (4.6 percentage points lower than at end-fiscal year 2020), reversing the increase associated with the COVID-19 crisis and falling below end-fiscal year 2019 levels before the start of the EFF programme.

The trajectory of debt is expected to continue to decline to 70.4 percent of GDP by end-fiscal year 2026, supported by a favourable interest rate-growth differential outlook, and fiscal adjustment efforts in the context of the EFF programme.—TAHIR AMIN