IMF cites Pakistan as model for debt, growth and reform drive

ISLAMABAD: The International Monetary Fund (IMF) has cited Pakistan as a successful example of its joint three-pillar approach with the World Bank to promote sustainable debt, stronger growth and reforms, particularly through improved domestic resource mobilisation and effective liability management operations aimed at attracting greater private-sector inflows at lower cost. This has been noted in the IMF Managing Director Kristalina Georgieva’s statement issued at the conclusion of the G20 Finance Ministers and Central Bank Governors meeting in Asheville, North Carolina. She stated, “Accelerating the implementation of the IMF-World Bank Three-Pillar Approach to support countries with sustainable debt and pursuing strong growth-enhancing reforms is a key priority. Together with the World Bank, we have strengthened support for countries on reform implementation and domestic resource mobilisation and continue to work on ways to encourage effective liability management operations, including incentivising higher private sector inflows at lower cost. This has worked well in countries such as Ecuador or Pakistan. Securing strong support from other partners, including bilateral creditors, is essential. We count on the G20 to take leadership in this collective support for growth and investment. ” The IMF Managing Director also said that the sovereign debt landscape for emerging and low-income countries has gradually improved in recent years, thanks to domestic policy efforts and international cooperation. But progress has been uneven, and persistent risks and uncertainty in the global economy, including spillovers from the significant increase in yields in advanced economies, call for policy discipline and underscore the importance of building buffers. The increase in global interest rates is of particular concern. As key advanced economy yields rise to multi-year highs, they lift most of the world’s yield curves up with them. In some emerging markets, this more than fully offsets hard-won spread compression. High refinancing needs and rising debt-service costs are constraining many developing economies, in particular low-income countries, limiting their capacity to finance critical spending on infrastructure, health, and education, which undermines growth and, in turn, debt sustainability. Georgieva said these challenges are compounded by a sharp decline in net external financing, including cuts in official development assistance and a marked reduction in new inflows from non-Paris Club creditors. She stressed that helping countries create fiscal space for growth-enhancing spending is even more pressing in the current environment. Copyright Business Recorder, 2026

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