Pakistan is looking to friendly countries for help in meeting its external financing needs for the upcoming fiscal year (FY) 2024-25. According to news reports, the government plans to roll over USD 12 billion in loans from Saudi Arabia, China, and the United Arab Emirates.
Breakdown of Loan Rollovers
- Saudi Arabia: USD 5 billion
- China: USD 4 billion
- United Arab Emirates: USD 3 billion
Total External Financing Need
Pakistan requires PKR 23 billion (approximately USD 12 billion) to meet its external financing needs for FY 2024-25.
Reasoning for Loan Rollovers
This strategy aims to bridge the gap in external financing and comes amidst ongoing negotiations with the International Monetary Fund (IMF) for a bailout program. The successful rollover of these loans would likely be seen as a positive step towards securing IMF approval.
Government’s Preparation for the IMF Mission
The Ministry of Finance has reportedly instructed relevant ministries to finalize budget targets swiftly in anticipation of an IMF mission’s arrival. This indicates the government’s urgency in securing the IMF program.
Overall, Pakistan’s focus on loan rollovers reflects its current economic situation and its efforts to stabilize its finances.