Islamabad, May 25, 2025: Pakistan’s fiscal deficit is forecast to narrow significantly to 5.4–5.5% of GDP in FY25, marking the lowest level in nearly a decade. This positive shift from 6.8% in FY24 signals a tightening grip on public finances and a more disciplined approach to economic governance.
As reported by Topline Securities, this decline highlights the impact of Pakistan’s fiscal reforms, introduced under the strict oversight of the International Monetary Fund (IMF). The reforms are central to strengthening economic stability, reducing reliance on external borrowing, and improving the country’s debt outlook.
Compared to the previous decade, when fiscal slippages were common due to political instability and inconsistent policy frameworks, this shift represents a notable turnaround. Analysts suggest that FY25 could be a make-or-break year, depending on how well the government adheres to reform paths post-IMF program.
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“Achieving a 5.4–5.5% deficit will be a milestone, but sustaining it after the IMF program ends is where the real challenge lies,” an economist from Karachi commented. The current figures reflect an ongoing commitment, but future credibility depends on consistency beyond donor-driven pressure.
While the government has managed to stay the course so far, maintaining fiscal discipline and avoiding populist policies during election cycles will be key to avoiding a slide back into deficits.
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