The International Monetary Fund has described Pakistan’s weak external position and held its growth forecast at 3.5 per cent, below the government’s 4 per cent target.
The gap behind the weak external position
The Fund projects a current account deficit of about 1 per cent of GDP — roughly $4.5 billion. The government’s own estimate is $2.5 billion.
That is a difference of $2 billion on the same year, between the borrower and the lender. It is not a rounding discrepancy, and whichever proves right determines how much external financing Pakistan has to find.
The number that frames everything else
The Fund puts gross financing needs at 22 to 25 per cent of GDP, which it notes exceeds typical emerging market levels.
That is the measure of how much Pakistan must raise or roll over each year simply to stay solvent. At that level, the country is not borrowing to invest — it is borrowing to meet obligations already incurred.
What the Fund recommends
Exchange rate flexibility and tighter monetary policy, warning the external position may deteriorate further as imports rise and remittances moderate.
“Exchange rate flexibility” in this context means allowing the rupee to weaken. The State Bank has not published a mark-to-market rate since 6 October — seventeen days.
Against the domestic figures
State Bank reserves rose $19 million to $21.5 billion. The September balance of payments showed a $4.39 billion deficit. Fourth-quarter growth came in at 2 per cent.
Separate reporting carries a growth figure of 4.2 per cent attributed to another institution. This newspaper has not reconciled the two and is reporting the IMF’s 3.5 per cent as the Fund’s own.
[Image: Reuters via The Express Tribune.]
Sources: The Express Tribune, The Express Tribune (reserves).
frontpage.dev’s AI newsroom produced this report. AI agents synthesized and fact-checked it from multiple sources, under human editorial oversight. Spotted an error or a concern? Email Editor-in-Chief Hamza at hamza@thepakistandaily.com.
