KARACHI – Pakistan’s economic journey continues to unfold amid a mixture of relief and uncertainty. Over $10 billion in external financing came in. Half are new loans to keep the financial wheels turning, and the other half are extensions of existing obligations that would otherwise have come due.
But amid this influx of capital, one question remains unresolved: whether the United Arab Emirates’ $2 billion debt rollover has been finalized. The central bank’s silence on the matter adds intrigue to an already complex financial narrative in which every decision on rollover or extension shapes the country’s economic path.
The financial story of Pakistan’s external borrowing has taken another dramatic turn. Pakistan has secured more than $10 billion in foreign financing, half of which is new loans and the rest is extensions of existing debt. But the biggest problem still remains unresolved. The central bank has remained silent on whether it will roll over a significant $2 billion in debt. united arab emirates With the approval, speculation and concerns are growing in the economic world.
Pakistan drew in $5.1 billion in new borrowing between July and January. But the broader picture is far from rosy. Loans and carried over debts from allies such as Saudi Arabia and china— With support from international Monetary Fund, It amounted to approximately 5 billion dollars. Although this sounds like a significant amount, it is actually down $1.4 billion compared to the same period last year, suggesting that external financing conditions are tightening.
Financial experts point to the unresolved UAE rollover as the main reason for the economic slowdown. The $2 billion facility has expired twice this month, first in January, without official confirmation from authorities. In contrast, State Bank of Pakistan Saudi Arabia did not hesitate to announce the extension of Saudi Arabian deposits worth $3 billion. Saudi Development FundCredit limit renewed repeatedly starting in 2021. Critics argue that silence on the UAE deal could indicate behind-the-scenes negotiations or deeper financial uncertainty.
China extended its $1 billion deposit for another year, and the IMF released a $1 billion tranche. Authorities are optimistic that total inflows, including rollovers, will exceed $25 billion in the current fiscal year. Pakistan faces a huge repayment burden of $12.5 billion in maturing deposits. With foreign exchange reserves standing at around $16 billion (including deposits), analysts warn that net reserves are substantially negative, raising questions about long-term financial stability.
The government had also hoped to raise $250 million through Eurobonds, but that plan was halted by what officials vaguely described as “mismanagement.” Meanwhile, the state secured a $269 million loan for expansion. Chashma Nuclear Power Plant Commercial borrowings were only $142 million, much lower than expected.
Asian Development Bank spent $622 million; world bank It provided $828 million. that Islamic Development Bank It contributed $502 million primarily in energy-related revenues. Despite these inflows, Pakistan’s external debt and liabilities now stand at $138 billion, an alarming figure that highlights the country’s dependence on international financing.
The Treasury insists there is no immediate crisis, noting that about 75% of external debt consists of concessional long-term loans (excluding IMF obligations) from multilateral and bilateral partners. Only 7% is commercial debt and the remaining 7% comes from Eurobonds. But rising global interest rates mean interest payments will rise, squeezing governments’ fiscal space and reigniting debates about economic mismanagement.
Opposition figures and economic commentators have seized on the figures, arguing that Pakistan’s dependence on foreign borrowing is unsustainable. It is pointed out that although bond issuance and export promotion plans were repeatedly announced, they were not realized. Meanwhile, government officials argue that external financing is still needed to stabilize the economy and finance development projects.
How much external debt does Pakistan have so far?
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