Pakistan has achieved a key milestone in meeting the International Monetary Fund’s (IMF) requirement to extend the average maturity timeline for both domestic and external loans. This move aims to lower future financing needs and ensure compliance with IMF structural benchmarks under the ongoing program.
Under the revised plan, the average maturity period for domestic loans will increase from the current 3 years and 8 months to 4 years and 3 months, while external debt repayments will be extended from 6.1 years to 6 years and 3 months. The IMF has set 2028 as the deadline for full implementation of this policy.
Officials note that extending the maturity period will reduce Pakistan’s financing burden in the coming years, providing greater fiscal space. The government will submit a report on the policy’s implementation to the IMF ahead of the next economic review.
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The process will begin in the current fiscal year, with adjustments in the debt management strategy to align with IMF guidelines. As part of the reforms, 30% of domestic loans will meet the IMF’s “average time to refix” criteria to stabilize the debt structure. Additionally, 30% of domestic loans will be issued at fixed policy rates, minimizing exposure to interest rate fluctuations.
Pakistan also plans to boost Shariah-compliant financing to 20% within three years, diversifying the debt portfolio. Moreover, the share of foreign loans will be capped at 40% of total debt stock to maintain sustainable external borrowing levels.
The IMF has stressed timely execution, and Pakistan has pledged to start the process immediately, with a detailed compliance report to be presented before the next review.
