KARACHI/ISLAMABAD: On Tuesday, Jameel Ahmad, the Governor of the State Bank of Pakistan (SBP), disclosed that Pakistan has only managed to pay $13.5 billion out of the $24.3 billion it was due to pay this year, indicating a significant shortfall that requires substantial rollovers and inflows to bridge.
Addressing analysts at the SBP, Governor Jameel Ahmad outlined Pakistan’s debt obligations for the ongoing fiscal year, citing a total of $20.4 billion in debt repayments and $3.9 billion in interest payments.
Of these amounts, Ahmad noted that $10.9 billion in debt and $2.6 billion in interest payments have already been fulfilled.
He emphasized the necessity for Pakistan to secure $4.8 billion before the fiscal year’s conclusion to meet its repayment targets, which includes $3.5 billion for debt servicing and $1.3 billion for interest payments.
Ahmad further mentioned expectations of rolling over approximately $2 billion worth of debt within the next two weeks, with additional plans for a further $4 billion rollover.
Pakistan’s economy has grappled with substantial current account deficits in recent years, leading to a depletion of foreign exchange reserves. The country has sought to address this by obtaining loans from ‘friendly countries’ and seeking bailout packages from the International Monetary Fund (IMF).
However, these measures have resulted in mounting debts, trapping the government in a cycle of borrowing to service existing loans.
To bolster reserves, the government has implemented measures such as cracking down on dollar smuggling and tightening import controls.
Despite these efforts, the living conditions for Pakistan’s growing population have worsened, exacerbated by historically high inflation rates.
