Islamabad: Pakistan faces $6.4 billion in dollar debt due over the next three years as Prime Minister Shehbaz Sharif’s new government is trying to meet bailout terms set by the International Monetary Fund.
The country, under pressure to keep its economy afloat and avert a sovereign default, needs about $3.16 billion to pay dollar bonds and loans this year, $1.52 billion next year and $1.71 billion in 2024, according to data.
With a $45 billion trade deficit in the current fiscal year to June and foreign-exchange reserves at $10.1 billion, or less than two months of imports, Pakistan faces the prospect of default for the second time in its history.
The external debt due in the coming fiscal year is estimated to be bigger by Fitch Ratings. The ratings firm includes bilateral obligations of $3 billion owed to Saudi Arabia in time deposits and $4 billion from China’s State Administration of Foreign Exchange, said Jeremy Zook, a Fitch analyst.
In a move aimed at meeting a key bailout condition set by the IMF to unlock the remaining $3 billion from a loan programme, the government raised the cost of gasoline and diesel by 30 rupees a liter.
IMF agreement likely in June
Pakistan is expected to reach an agreement with IMF next month to support the cash-strapped country’s sagging economy, finance minister Miftah Ismail has said. Pakistan has repeatedly been seeking international aid to support its failing economy. The talks with the IMF are being held in the Qatari capital Doha.
Ismail said the country is projected to need $36-37 billion in foreign financing in the next fiscal year. Ismail revealed that at present the government was not considering raising fresh foreign debt from the global capital market and commercial banks after the country’s international bonds lost almost one-third of their value, while their yields went up significantly, ‘The Express Tribune’ reported.
He said instead of economic growth, controlling inflation was the top priority of the government. Meanwhile, Pakistan’s information minister Marriyum Aurangzeb said the next elections in Pakistan will be held in August 2023 and no negotiations will be done with Imran Khan while she slammed Pakistan Tehreek-eInsaf (PTI) for chaos during the recent protest march
