Islamabad
Pakistan’s financial situation is expected to worsen in the coming years, with an impending external debt repayment of USD 100 billion due within four years. This amount far exceeds the country’s current foreign exchange reserves of approximately USD 9.4 billion.
Deputy Finance Minister Ali Pervaiz Malik confirmed that the federal government’s external debt is nearly ten times the available reserves. As a result of this financial strain, the government plans to seek rollovers and restructure its debts. Finance Minister Muhammad Aurangzeb highlighted that even with a new USD 7 billion program from the International Monetary Fund (IMF), Pakistan will struggle to meet its external financing needs.
The IMF has identified a USD 5 billion financing gap between 2024 and 2026. Malik did not confirm if the government is actively pursuing debt restructuring options. The upcoming USD 100 billion repayment, from spring 2024 to 2027, does not account for payments related to the central bank’s liabilities or the current account deficit.
Officials indicated that the repayment strategy will involve securing rollovers from international lenders, with anticipated amounts including USD 5 billion from Saudi Arabia, USD 4 billion from China, and USD 3 billion from the UAE. The situation underscores the urgent need for Pakistan to negotiate with its creditors to avoid further financial distress.
