The International Monetary Fund (IMF) has forecast that Pakistan will need over $115 billion in external financing over the next five years to meet its obligations and maintain economic stability.
In its recent assessment of Pakistan’s financing outlook, the IMF revealed that the country will need $19.3 billion in the 2025-26 fiscal year alone. This demand is projected to rise slightly to $19.75 billion in 2026-27 and spike to $31.35 billion in 2027-28, the peak requirement during the period. Subsequently, Pakistan would need $23.13 billion in 2028-29 and $22.16 billion in 2029-30.
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While the IMF acknowledged some improvements in Pakistan’s debt servicing capabilities due to recent reforms and policy steps, it stressed that external vulnerabilities persist. The Fund cautioned that any deterioration in ties with India, policy backtracking, or populist subsidies could undermine the country’s fragile economic gains.
The IMF further pointed out that Pakistan’s access to commercial financing will likely remain limited in FY26, with just $85 million anticipated through new commercial loans. Instruments such as Eurobonds may stay inaccessible unless the country sees a significant boost in its credit ratings, potentially by 2027.
Of the $19.3 billion needed for FY26, the IMF expects Pakistan to raise about $17 billion through new and rollover loans from bilateral sources, still leaving a financing shortfall of $2.4 billion.
Regarding funding sources, the IMF noted that Saudi Arabia is likely to extend $800 million annually in oil credit. Pakistan also intends to raise $400 million by issuing Panda Bonds in China, with an additional $410 million projected from climate-related financing.
The IMF report also clarified that the World Bank will not offer budgetary support for FY26, while the Asian Development Bank (ADB) may contribute around $250 million.
On the balance of payments side, the IMF expects the current account deficit for FY26 to remain relatively low at $1.5 billion. For FY25, the projected deficit has been revised significantly downward to just $229 million from an earlier estimate of $3.6 billion.
Although the improved external position has led to cautious optimism about growing foreign exchange reserves, the IMF warned of potential risks ahead, especially with recent U.S. tariff policies that could weigh on Pakistan’s export earnings and GDP growth.
