According to details, the International Monetary Fund (IMF) has once again raised concerns in the context of the China Pakistan Economic Corridor (CPEC) and has said that new investment in early 2022 could boost growth prospects but Contingent liabilities are also a threat to debt sustainability.
The IMF, in its Public and External Debt Sustainability Analysis, released after the approval of the EFF program for Pakistan, along with the Fund's staff report, said that China-Pakistan Economic Corridor (CPEC) will be ready by early 2022. The new investment was announced by , which was originally established in 2013.
While the infrastructure in these second-stage investments may increase growth prospects, contingent liabilities also pose a threat to debt sustainability.
The report states that Pakistan's public debt is considered sustainable with strong policies and strong growth, but with greater uncertainty in part because fiscal easing in FY22H2 lowered the debt ratio at the time of the sixth review. I stopped the decline.
The debt-to-GDP ratio is likely to increase from 77.9 percent at the end of FY21 to 78.9 percent at the end of FY22 before falling to around 60 percent by the end of FY27, assuming the EFF Adjustment efforts have been fully implemented in the context of the programme.
The IMF warned that higher interest rates, a slowdown in expected growth due to policy tightening, pressure on the exchange rate, policy renewal, slower medium-term growth, and contingent debt obligations related to SOs. are significant threats to sustainability.
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