Government Engaged in Efforts to Secure $12 Billion Debt Rollover from China, Saudi Arabia, and UAE
The International Monetary Fund (IMF) Executive Board has released its meeting schedule through September 4, notably omitting Pakistan from the list once again.
Despite this, the Finance Ministry remains hopeful that approval for the $7 billion bailout package will be granted in September.
The government is actively working to secure a rollover of $12 billion in debt from China, Saudi Arabia, and the United Arab Emirates (UAE). Additionally, Pakistan has requested a further $1.2 billion loan from Saudi Arabia to address a $2 billion financing shortfall. Currently, Pakistan holds $5 billion in cash deposits from Saudi Arabia, $4 billion from China, and $3 billion from the UAE.
Pakistan is also managing an additional commercial debt burden of $4.5 billion, including obligations to China. Federal Minister for Finance Muhammad Aurangzeb stated on August 23 that the IMF Executive Board is expected to approve the new loan program in September. He noted that discussions with the IMF occur every other day and that China, Saudi Arabia, and the UAE have responded positively. He further mentioned that these countries would update the IMF through their executive directors.
Aurangzeb indicated that Pakistan needs $2 billion in external financing for the current fiscal year and $3 billion over the next 37 months.
This marks the third occasion Pakistan has been excluded from the IMF Executive Board’s meeting schedule, delaying the anticipated approval of the $7 billion bailout loan program, which was initially expected by the end of August. The most recent schedule, released on August 21, indicates that the IMF board will review applications from three other countries, including Vietnam, between August 28 and 30. Pakistan’s request for a new loan program has been postponed until next month.
Sources attribute the delay primarily to the incomplete rollover of the $12 billion debt from friendly nations. The IMF had stipulated stringent conditions requiring Pakistan to secure external financing assurances before the board meeting.
