Debt-Ridden Pakistan to Chair IMF and World Bank Governors’ Boards After 74 Years

Pakistan to Head IMF and World Bank Boards in 2027 Despite Continued Reliance on Bailouts

Pakistan, which is seeking approval for an additional $1.2 billion in funding from the International Monetary Fund (IMF), will chair the Boards of Governors of the IMF and World Bank Group in 2027. The appointment marks a significant diplomatic development for Islamabad, even as the country continues to depend on international financial assistance to stabilise its economy.

Pakistan’s Ministry of Economic Affairs announced on Friday that the country would assume the position for the first time since 1953. Economic Affairs Minister Ahad Khan Cheema, Pakistan’s governor to the World Bank, was named the incoming chair during the World Bank-IMF Annual Meetings in Bangkok.

The ministry termed the appointment a “historic milestone”, highlighting the opportunity for Pakistan to contribute to international economic discussions and encourage cooperation among member nations.

The chairmanship, however, is primarily a representative role. It allows Pakistan to preside over proceedings involving finance ministers and central bank governors from member countries but does not give Islamabad the power to determine lending policies or approve financial assistance.

Pakistan’s Long History of IMF Assistance

Pakistan has entered at least 25 IMF loan programmes since becoming a member of the institution in 1950. Its repeated appeals for assistance reflect persistent economic weaknesses, including foreign exchange shortages, inflationary pressures, mounting external obligations and difficulties in maintaining adequate reserves.

The country is currently operating under a $7 billion Extended Fund Facility (EFF), which supports economic reforms and addresses balance-of-payments pressures. It is also receiving assistance through a $1.4 billion Resilience and Sustainability Facility (RSF), aimed at addressing climate-related economic risks.

A recent staff-level agreement could pave the way for approximately $1 billion in additional funding under the EFF and $210 million under the RSF. The proposed disbursements require approval from the IMF Executive Board and follow reviews of the two programmes led by Fund mission chief Iva Petrova.

If approved, the funding would take cumulative disbursements under the programmes to approximately $5.7 billion.

The World Bank has previously warned that Pakistan’s growth model, characterised by high public consumption, low productivity and heavy borrowing, is unsustainable. This raises questions about whether continued external assistance can help the country establish a more resilient economic foundation.

Growth and Reserves Show Signs of Improvement

The IMF’s latest assessment points to progress in Pakistan’s economic stabilisation efforts. The lender said the country had maintained macroeconomic stability despite the conflict in West Asia, supported by policy measures and its ongoing financial programme.

Pakistan’s real GDP grew by 4 per cent during the first three quarters of fiscal year 2025-26. However, rising energy costs and supply disruptions subsequently weakened economic momentum, bringing the estimated full-year growth rate to 3.6 per cent.

Inflation declined to around 10.3 per cent in September after peaking in May. Remittances from overseas Pakistanis helped keep the current account broadly balanced during FY26, while gross foreign exchange reserves reached approximately $21 billion at the end of September.

According to Petrova, sovereign rating upgrades and the country’s renewed access to international financial markets indicate improved confidence in its economic policies.

Nevertheless, Pakistan remains exposed to several external risks, including geopolitical instability, volatile energy prices, disruptions to global trade and tighter international financing conditions. These factors could reverse some of the recent gains and increase pressure on its external financing requirements.

International Recognition Amid Financial Challenges

The 2027 chairmanship will give Pakistan a prominent platform to participate in discussions on global economic cooperation. Yet the position will not directly resolve the structural problems that have repeatedly pushed the country towards international lenders.

Sustained growth, improved productivity, stronger public finances and reduced dependence on external borrowing remain essential to achieving long-term economic stability.

While the appointment represents an important diplomatic achievement for Islamabad, its larger challenge will be to turn the benefits of international engagement and financial assistance into lasting economic progress.