Islamabad [Pakistan], September 20 : The critical condition of Pakistan's finances may take a turn for the worse within the next four years. The country will soon have to pay an external debt of USD 100 billion which is several times more than the current foreign exchange reserves.
Pakistan's Deputy Finance Minister Ali Pervaiz Malik on Thursday revealed that in the coming four years, Pakistan will have to repay USD 100 billion to external moneylenders. Presently, the external debt owed by Pakistan's federal government is around 10 times more than the current USD 9.4 billion gross foreign exchange reserves of the country, the Express Tribune reported.
Reportedly, Pakistan is planning to attempt the repayment upcoming repayment by securing rollovers and restructuring its external debts due to its deteriorating financial condition. Another disclosure made by Pakistani Finance Minister Muhammad Aurangzeb stated that despite signing a USD 7 billion International Monetary Fund new programme, the country will not be able to meet its external financing requirements.
According to the Express Tribune Report, IMF has found a USD 5 billion financing gap between 2024 to 2026, Aurangzeb told Pakistan's Standing Committee on Finance.
The same report also claimed that Ali Pervaiz Malik also tried to duck a question of whether the government was considering debt restructuring. Additionally, the same news report claimed that the owed USD 100 billion external debt from spring 2024 to 2027 is exclusive of any payments for the liabilities in the balance sheet of the Pakistan Central Bank and financing the current account deficit of the country.
Notably, the current scenario and the statement of Ali Pervaiz Malik highlight that the government of Pakistan does not have a plan for repaying these loans. The only way out for Paksitan currently, is to request its international lenders to restructure their loans for one more year.
The Express Tribune report also claimed that the Director General of Debt, Mohsin Chandna has also told the standing finance committee that amount due for the fiscal year 2024-25, Pakistan's external debt has amounted to USD 18.8 billion which even excludes the repayment of the debt, the responsibility of the central bank.
"The USD18.8 billion would be paid in the same manner it had been paid in the past, which is the rollovers", said the Minister of State for Finance while responding to a question asked by MNA Nafisa Shah. The DG Debt also claimed that the cash deposits were USD 12.7 billion, as Kuwait had also given a USD 700 million loan in the past.
According to the same news report rollovers that Pakistan will attempt for is cumulatively USD 100 billion including loans from Saudi Arabia USD 5 billion, China USD 4 billion, UAE USD 3 billion and Kuwait USD 700 million, said Chandna.
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