Economy: Pakistan has to pay $21 bn in foreign debt in 2023, says FM Ismael
Virendra Pandit
New Delhi: Broke Pakistan, which is facing default and hoping for an urgent bailout from the International Monetary Fund (IMF) in June to avert a Sri Lanka-type instability, is burdened with the approaching payment of USD 21 billion in foreign debt in 2023.
On Monday, a US dollar was equal to 198.67 Pakistani rupees, which continued to fluctuate.
In April, Sri Lanka, another bankrupt country in South Asia, defaulted on USD 51 billion worth of foreign loans.
Islamabad, currently trying to get USD 6 billion from the IMF in the Qatari capital Doha, may agree with the global crisis lender in June to resurrect an enhanced bailout package to support the cash-strapped country’s sagging economy, Finance Minister Miftah Ismail said on Saturday.
He said Islamabad needs USD 36-37 billion in foreign financing in the next fiscal year, the media reported.
Addressing a webinar on the National Dialogue on Economy: The Way Forward for Pakistan, organized by Nutshell Conferences and Corporate Pakistan Group, he revealed the government was not considering raising fresh foreign debt from the global capital market and commercial banks as Pakistan’s international bonds lost almost one-third of their value, while their yields went up significantly.
Ismael said instead of focusing on economic growth, controlling inflation was the top priority of the government. Inflation control will lead to economic growth, he maintained.
Citing details, he said Pakistan has to repay USD 21 billion in foreign debt in the next fiscal year. Besides, it will require another USD 10-15 billion to finance the current account deficit (CAD).
The government is also aiming to boost the country’s foreign exchange reserves by USD 5 billion to USD 15 billion next year.
So, Pakistan is trying to enter the IMF’s loan program (worth USD 6 billion) to arrange the required financing, he said, about the progress in the ongoing talks which began on May 18 in Doha.
Ismael invited all political parties to frame the proposed Charter of Economy, which could include the minimum economic agenda by setting aside their political differences.
Meanwhile, according to reports, Saudi Arabia may provide Pakistan with a “sizable package” of USD 8 billion to help the cash-starved country bolster dwindling forex reserves and revive its ailing economy.
Pakistan secured this deal, according to some media reports, during Prime Minister Shehbaz Sharif’s recent visit to Saudi Arabia. The financial package includes a doubling of the oil financing facility, additional money either through deposits or Sukuks, and rolling over of the existing USD 4.2 billion facilities.
