Debt-strapped Pakistan to chair IMF, World Bank boards of governors in 2027

Pakistan is awaiting approval for another $1.2 billion from the IMF, yet the repeat borrower will chair the Boards of Governors of the IMF and World Bank Group in 2027.The role puts the country in charge of proceedings attended by member countries’ finance ministers and central bank governors, giving Islamabad a prominent platform but no control over lending decisions.Pakistan will hold the chairmanship for the first time since 1953, its Ministry of Economic Affairs said on Friday.Economic Affairs Minister Ahad Khan Cheema, Pakistan’s governor to the World Bank, was announced as the incoming chair for 2027 during the World Bank-IMF Annual Meetings in Bangkok. The ministry called the appointment a “historic milestone”, saying it would allow Pakistan to contribute to global economic discussions and facilitate dialogue among member countries. For Islamabad, however, the diplomatic recognition comes alongside a continuing need for external financing.A BORROWER AT THE HEAD OF THE TABLEPakistan has entered into at least 25 IMF loan programmes since joining the institution in 1950. Its repeated returns to the lender reflect persistent difficulties in securing enough foreign currency to meet external obligations, compounded by inflation and financing pressures. It is currently supported by a $7 billion Extended Fund Facility (EFF) for economic reforms and external payment needs, alongside a $1.4 billion Resilience and Sustainability Facility (RSF) to address climate-related risks.The latest staff-level agreement could unlock about $1 billion under the EFF and $210 million under the RSF, taking total disbursements under both programmes to about $5.7 billion. It requires IMF Executive Board approval and covers the fourth EFF review and third RSF review, following talks led by the Fund’s Iva Petrova.The World Bank has described Pakistan’s growth model, marked by high public consumption, low productivity and heavy borrowing, as unsustainable. The longer-term test is whether these loans can support growth that reduces the need for another bailout.STABILITY RETURNS, DEPENDENCE REMAINSThe latest IMF assessment offers signs of improvement. The lender said Pakistan had preserved macroeconomic stability despite the West Asia conflict, helped by strong policies and support under its loan programme.Real GDP grew 4 per cent in the first three quarters of FY26. Higher energy prices and supply disruptions then weakened momentum, leaving full-year growth estimated at 3.6 per cent.Inflation eased to about 10.3 per cent in September after peaking in May. Strong remittances helped keep the current account broadly balanced in FY26, while gross reserves rose to about $21 billion by the end of September.Petrova pointed to sovereign rating upgrades and renewed access to international markets as signs of stronger policy credibility. But geopolitical tensions, volatile energy prices, tighter global financing conditions and trade disruptions remain risks.Pakistan has secured the chairmanship. Reducing its need for financial support from the same institutions will be a harder task.- Ends