IMF sees Pakistan reserves doubling by 2031

May 15, 2026 (MLN): By the time Pakistan's fiscal year 2031 draws to a close, the country's foreign exchange reserves, once a source of existential anxiety, are projected to stand at $31.7 billion.

That is more than double the $14.5 billion recorded just two years ago.

This is the central promise buried deep inside the IMF's latest staff report, released today: a decade-end Pakistan that has largely paid its way back to stability.

Perhaps the most consequential numbers in the entire report are those tracking Pakistan's public debt burden.

At 72.8% of GDP in FY25, the debt load is heavy. But the IMF's baseline projects it falling every single year, to 67.2% by FY27, then 61.4% by FY28, and all the way down to 58.9% of GDP by FY31.

For a country that spent years on the edge of debt distress, this trajectory represents a genuine structural shift.

The inflation warning

Not every projection is encouraging. Inflation, tamed to 4.5% in FY25, is forecast to spike sharply to 8.4% in FY27 as the ripple effects of the Middle East war flow through to domestic energy and commodity prices.

The IMF expects it to recede to 6.5% by FY29 and hold there through FY31.

But that window of pain in FY27 could be severe for Pakistan's most vulnerable households, and the Fund is explicit that keeping monetary policy tight will be essential to prevent inflation from becoming entrenched.

The post-2029 question mark

The IMF's numbers contain one quietly alarming signal buried in the fiscal tables. Pakistan's underlying primary surplus, the bedrock measure of fiscal discipline, is held at 2.0% of GDP from FY27 through FY29.

But the projections then show it collapsing: to 1.0% in FY30, and all the way to 0.0% by FY31.

At the same time, the overall budget deficit is forecast to widen from 2.9% in FY29 back out to 4.7% of GDP by FY31.

The IMF does not explain this cliff-edge in the public summary, but it will be the defining fiscal test of whatever government is in power when the EFF programme ends.

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