IMF Highlights Pakistan as Example of Debt and Reform Progress

The International Monetary Fund (IMF) has highlighted Pakistan as an example of how its joint three-pillar framework with the World Bank can support debt sustainability, economic growth and structural reforms.

 

The IMF said the approach has focused on strengthening domestic revenue mobilisation and improving liability management operations to help countries attract higher private-sector investment at lower financing costs.

 

IMF Managing Director Kristalina Georgieva made the remarks in a statement following the G20 Finance Ministers and Central Bank Governors meeting in Asheville, North Carolina.

 

Georgieva said accelerating implementation of the IMF-World Bank three-pillar approach remains a key priority for supporting countries in managing debt sustainably while pursuing reforms that can strengthen economic growth.

 

She noted that the framework has produced positive results in countries including Pakistan and Ecuador, particularly through greater support for reform implementation, domestic resource mobilisation and liability management.

 

The IMF chief also stressed the importance of support from international partners, including bilateral creditors, with G20 countries playing a key role in supporting investment and growth.

 

According to Georgieva, the debt outlook for emerging and low-income economies has improved gradually in recent years due to domestic policy measures and international cooperation. However, progress remains uneven, while global economic uncertainty and higher borrowing costs continue to pose risks.

 

Rising yields in advanced economies are pushing up borrowing costs across global markets. In some emerging economies, the increase has offset gains achieved through lower sovereign risk spreads.

 

Georgieva warned that elevated refinancing requirements and rising debt-servicing costs are restricting the ability of many developing and low-income countries to fund essential infrastructure, healthcare and education spending. This could weaken economic growth and, in turn, put further pressure on debt sustainability.

 

She added that the situation has been made more difficult by declining net external financing, including reduced official development assistance and weaker new inflows from non-Paris Club creditors.

 

Against this backdrop, the IMF stressed that creating fiscal space for growth-enhancing investment has become increasingly important for developing economies.