The International Monetary Fund (IMF) has reported that Pakistan requires $110 billion in external financing over the next five years to sustain its economy. This need arises following Pakistan’s successful management of $18.81 billion in external financing for the current year.
According to the IMF, meeting debt repayment obligations will rely heavily on effective policy implementation and the availability of timely external funding. Notably, assurances for $16.8 billion in loan rollovers were obtained this year from countries like China and Saudi Arabia, in addition to $2.5 billion from the Asian Development Bank and the Islamic Development Bank.
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Looking forward, Pakistan anticipates rolling over $6.6 billion in loans owed to international commercial banks over the next three years, while an estimated $14 billion is expected from global financial institutions by 2028. The World Bank is projected to contribute $7.1 billion, with an additional $5.6 billion from the ADB. Short-term commercial loans are likely to be sought during the 2025-26 period.
By mid-2027, Pakistan plans a phased approach to the international bond market, forecasting foreign exchange reserves to reach $22.5 billion by 2028. However, the IMF warns that these reserves will cover only about 3.1 months of imports, underscoring the delicate state of Pakistan’s financial landscape.
Despite financial commitments from various international entities, the IMF report highlights significant risks. The report stresses that ongoing reforms and adherence to the IMF program are critical for securing the required external funding. Achieving economic stability will also necessitate political consensus among Pakistan’s leadership to ensure long-term sustainability.
