Hafiz M. Ahmed
When Egypt and Pakistan together owe the International Monetary Fund nearly US $18 billion, it is more than a sign of economic distress — it is a reflection of how the global financial order is reshaping itself under pressure.
The IMF’s balance sheet has swelled to its highest level in decades. As of October 2025, 86 countries collectively owe the Fund SDR 118.9 billion (approximately US $162 billion), according to the IMF and Al Jazeera data. That total is larger than the GDP of entire regions, underscoring how widespread financial vulnerability has become amid a strong dollar, high interest rates and sluggish trade.
Among the most exposed are Muslim-majority economies, several of which now rank among the Fund’s largest borrowers — a pattern that reveals not just crisis, but opportunity for structural renewal.
Egypt and Pakistan: The IMF’s Largest Muslim-Majority Clients
The IMF’s loan book is dominated by three countries: Argentina, Ukraine, and Egypt. Cairo’s outstanding obligations stand at SDR 6.89 billion, or about US $9.38 billion. That places it as the Fund’s third-largest debtor worldwide.
Egypt’s financial relationship with the IMF has deepened since 2016, when the country began a sweeping economic overhaul in exchange for multibillion-dollar support. Since then, a succession of devaluations, surging inflation, and subsidy reforms have tested social stability and household resilience.
Next in line is Pakistan, owing SDR 6.59 billion (approximately US $8.96 billion) — the fourth-largest exposure globally. Despite a series of IMF programmes over the past decade, Islamabad continues to face chronic current-account deficits, weak tax revenues and a narrow export base. Its latest extended arrangement, approved in 2024, aims to anchor fiscal consolidation and exchange-rate flexibility.
The picture continues with Bangladesh (SDR 2.92 billion ≈ US $3.98 billion), a relative newcomer to IMF support after years of steady growth. Morocco (SDR 0.94 billion ≈ US $1.28 billion) and Mauritania (SDR 0.33 billion ≈ US $0.45 billion) hold smaller, but still notable, exposures.
| Country |
IMF Credit Outstanding (SDR bn) |
Approx. US $ bn |
Global Rank* |
| Egypt |
6.89 |
9.38 |
3rd overall |
| Pakistan |
6.59 |
8.96 |
4th–5th overall |
| Bangladesh |
2.92 |
3.98 |
Top 15 |
| Morocco |
0.94 |
1.28 |
Mid-tier |
| Mauritania |
0.33 |
0.45 |
Lower exposure |
*Based on IMF data, 17 October 2025. Conversion rate: 1 SDR ≈ US $1.36.
An Era of Permanent Crisis Management
That two of the IMF’s five largest debtors are Muslim-majority nations highlights a deeper trend: emergency lending has become a long-term feature of the global economy.
For Cairo and Islamabad, IMF loans have evolved from short-term bailouts to quasi-permanent lifelines. In both cases, external shocks — energy prices, global inflation, and capital flight — collided with domestic fragilities: limited industrial diversification, rising debt service costs and governance inefficiencies.
“The Fund is no longer just a firefighter,” says a London-based emerging-markets strategist. “It’s become an anchor for economies that haven’t yet built their own stabilisers.”
That dependence, however, comes at a cost. IMF programmes often entail politically sensitive reforms — subsidy cuts, tax hikes, privatisation — that governments struggle to sustain amid public fatigue.
The Politics of Conditionality
Egypt’s commitments under its latest IMF programme include divesting state-owned assets and fully floating its currency. Implementation has been partial at best. Pakistan faces even steeper demands: boosting tax collection, overhauling the energy sector, and reducing fiscal leakages from state-owned enterprises.
The reforms are economically sound but politically fraught. Both governments operate in fragile environments where public discontent can quickly spill into the streets.
Bangladesh’s case is different but instructive: once hailed as a model of stability, it now faces declining garment exports, mounting import costs and currency depreciation. The IMF’s SDR 2.9 billion arrangement aims to strengthen its foreign-exchange regime and encourage green investment — yet progress remains slow.
A Shared Pattern of Strain
Muslim-majority economies, from North Africa to South Asia, exhibit a recurring fiscal pattern: high subsidy spending, limited tax capacity and dependence on remittances or narrow export bases. As global liquidity tightens, these structural weaknesses are exposed. For investors, the rise in IMF credit to the developing world serves as both reassurance and warning. It signals a safety net — but also a lack of self-sufficiency.
In the words of one Fund official, “The IMF’s objective is to be temporary, not perpetual. But the scale of demand suggests the global economy is caught in a cycle of dependence.”
Towards Fiscal Independence
The challenge for Egypt, Pakistan, and their peers is not simply repaying the Fund — it is graduating from it. Sustained reform, credible fiscal discipline, and greater private-sector dynamism are prerequisites for independence.
That path requires politically difficult choices:
-
Widening the tax base to reduce reliance on foreign borrowing.
-
Reforming energy subsidies to create fiscal space.
-
Allowing true exchange-rate flexibility to restore external competitiveness.
-
Investing in human capital to diversify growth beyond low-value exports.
Without these adjustments, IMF credit will remain a revolving door — an expensive form of crisis management.
A Moment of Reckoning
The IMF’s own data show that the Fund’s outstanding credit is now approaching levels last seen after the 2008 financial crisis. But this time, the geography of debt is different. The largest borrowers are no longer confined to Latin America or Eastern Europe; they stretch from Cairo to Islamabad to Dhaka.
That shift underscores both the growing weight of Muslim-majority economies in global finance and the unfinished business of reform within them.
For these nations, 2025 may prove decisive: either the year they entrench another cycle of dependency, or the year they begin building resilience.
In the end, as one regional economist put it, “IMF debt isn’t destiny. It’s a diagnosis — and a chance to rewrite the prescription.”
Hafiz Maqsood Ahmed is the Editor-in-Chief of The Halal Times
