IMF Projects Govt Expenditure to Increase Significantly in 2024

The International Monetary Fund (IMF) has projected a significant increase of 0.7 percent in the government expenditure for Pakistan from 19.2 percent of Gross Domestic Product (GDP) in 2023 to 19.9 percent in 2024. According to the IMF report “Fiscal Monitor, Fiscal Policy in the Great Election Year”, the government gross debt for Pakistan is projected to decline from 77.1 percent of GDP in 2023 to 71.8 percent in 2024. The Fund has projected a decline in the net debt for Pakistan from 72.1 percent of the GDP in 2023 to 67.9 percent in 2024. The government revenue is projected at 12.5 percent of GDP for 2024 and 12.4 percent for 2025 against 11.4 percent during the same period in 2023 and 12.1 percent in 2022. The Fund has projected the government primary balance at 0.4 percent for 2024 against -0.9 percent in 2023. Further, the government’s overall balance is projected at -7.4 percent for 2024 against -7.8 percent in 2023. According to the report the country’s debt to average maturity in 2024 is estimated at 27.4 percent of GDP. There would be a total gross financing need of about 23.7 percent of GDP in 2024. Gross financing need is defined as the projected overall balance and maturing government debt in 2024. The projected interest rate – growth differential 2024-29 is -4.3 percent while the nonresident holding of general government debt, 2023 is projected at 32 percent of the total. The report noted that several economies with relatively high deficit levels are projected to undergo stronger fiscal consolidation over the medium term (for example, Pakistan).