Cash-strapped Pakistan has requested $2 billion in financial aid from its close ally China for a year, according to a media report on Saturday.
Interim Prime Minister Anwarul Haq Kakar, in a letter, asked Chinese Premier Li Qiang to renew the debt once the loan deposit time from China is completed on March 23.
In his message, Mr. Kakar expressed his gratitude to China for the financial assistance provided to Pakistan during its economic crisis as the cash-strapped country secured a safe deposit worth a total of $4 billion in loans from China, reducing the increasing pressure on the country. Its external pressures. Paying off debts and stabilizing its foreign exchange reserves, The Express Tribune newspaper reported.
Earlier this month, the UAE renewed Pakistan’s outstanding $2 billion loan.
Along with the United Arab Emirates, Saudi Arabia deposited $5 billion in the State Bank of Pakistan.
After the loan was renewed by the UAE, the interim government asked the International Monetary Fund to send a new mission this month to hold talks on the final tranche of the loan amounting to $1.2 billion.
The IMF’s next task is crucial not only to secure the final tranche of the loan, but also to begin negotiations on a new long-term program.
While speaking to a private TV news channel recently, former Finance Minister Ishaq Dar said that if his party – Pakistan Muslim League-Nawaz (PML-N) – wins the elections and forms the government, the decision on the new IMF program will be made as soon as possible. .
Mr Dar, a four-time Finance Minister of the country, added that if his party decided not to join the IMF programme, it would immediately start implementing austerity measures.
The International Monetary Fund has made new amendments in its new staff-level report on financing available to Pakistan.
The Washington-based bank increased its forecast for budget support loans to $3 billion but reduced project financing to $3.7 billion for this fiscal year.
The report said that total external financing requirements were reduced to slightly less than $25 billion, with slight downward adjustments in current account deficit expectations.
The report indicated that the global lender made a slight adjustment of $575 million in its current account deficit expectations compared to July estimates.
The International Monetary Fund now projects the deficit at $5.7 billion, or 1.6% of GDP – an estimate that appeared at the higher end.
Pakistan is in economic ruin and running a massive fiscal deficit without long-awaited structural reforms sought by global creditors such as the International Monetary Fund and World Bank, along with bilateral partners such as China and the United Arab Emirates.
The main reason behind Pakistan’s economic problems is its staggering debt levels, which, as of 2023, amount to nearly $125 billion owed to external creditors, almost a third of which is to China.
This is a featured article available exclusively to our subscribers. To read more than 250 featured articles every month
You’ve exhausted your free articles limit. Please support quality journalism.
You’ve exhausted your free articles limit. Please support quality journalism.
I had read {{data.cm.views}} Out of place {{data.cm.maxViews}} Free articles.
This is your final free article.