https://arab.news/by7ss
- Debt rollover commitments from China, Saudi Arabia and UAE helped Pakistan secure IMF bailout last year
- Development takes place as IMF delegation holds first review of Pakistan’s $7 billion loan program in Islamabad
KARACHI: China has rolled over a $2 billion loan to Pakistan, the adviser to the finance minister of Pakistan confirmed on Saturday amid Islamabad attempts to strengthen its financial reserves.
The development takes place as an International Monetary Fund (IMF) delegation is in Islamabad to conduct its first review of the $7 billion loan agreement reached between the two sides last year. The IMF delegation will assess the government’s performance in meeting key conditions of the loan. A successful review would secure the release of an additional $1 billion for Pakistan.
Debt rollover commitments from Pakistan’s allies and regional partners China, Saudi Arabia and UAE were instrumental in helping Islamabad secure the bailout program last year to keep its fragile economy afloat.
“Yes, it is confirmed that China has made this rollover,” Khurram Schehzad, the adviser to the finance minister, told Arab News on the phone. He confirmed the amount of the rollover was $2 billion.
Pakistan needs to repay over $22 billion in external debt in fiscal year 2025, including nearly $13 billion in bilateral deposits, Fitch said.
Pakistan’s Finance Minister Muhammad Aurangzeb has repeatedly said the country aims to escape its prolonged macroeconomic crisis by boosting exports, undertaking long-term financial reforms and ensuring economic growth led by the private sector.
As per its deal with the IMF, Pakistan has agreed to undertake reforms in its energy sector, widen the tax net and privatize loss-making state-owned enterprises.
Pakistan was able to build some trust with the IMF by completing a short-term nine-month program last year. Previous loan programs in Pakistan ended prematurely or saw delays after the governments at the time faltered when it came to meeting key conditions.