Dawn
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06:24 Dec 27, 2025
ISLAMABAD: Amid improving fiscal space, the International Monetary Fund (IMF) has projected a declining Public Sector Development Programme (PSDP), rising defence spending and generally stabilising interest payments from the current year onwards through the fiscal year 2030. IMF projections show that interest payments for the last fiscal year (FY25) were originally estimated at 7.7 per cent of GDP but ended at 7.8pc. For the current year, the Fund has revised its estimate to 6.5pc of GDP from 6.7pc in view of lower policy rates. For the next fiscal year (FY27), markup payments are estimated to drop further to 5.9pc of GDP, to be followed by 5.2pc of GDP in FY28, 5.1pc in FY29 and finally settling at 4.8pc in FY30 amid falling policy rates and resultant lower debt payments. In absolute numbers, interest payments are estimated to slightly decline to Rs8.225 trillion during the current year, down from Rs8.88tr at the close of FY25. This would remain almost static around Rs8.2tr in FY27 and FY28 and then incre...