Islamabad: Pakistan is staring at a daunting task of repaying USD 100 billion in external debt over the next four years, a figure nearly 10 times higher than its current foreign exchange reserves of USD 9.4 billion.
According to The Express Tribune, the repayment burden from 2024 to 2027 excludes additional liabilities on the central bank’s balance sheet and the funds required to finance the current account deficit.
Minister of State for Finance, Ali Pervaiz Malik, informed the National Assembly Standing Committee that the government has no solid plan to repay the debt, except to seek yearly extensions from lenders. Malik assured that the debt could be managed through rollovers or by replacing existing loans with new ones.
Director General Debt, Mohsin Chandna, revealed that rollovers are expected mainly from Saudi Arabia (USD 5 billion), China (USD 4 billion), the UAE (USD 3 billion), and Kuwait (USD 700 million). However, relying on these rollovers has already delayed an International Monetary Fund (IMF) meeting to approve a 37-month, USD 7 billion Extended Fund Facility for Pakistan, now set for September 25.
Finance Minister Muhammad Aurangzeb acknowledged that despite the new IMF program, Pakistan still faces a USD 5 billion financing gap for the 2024-2026 period. Opposition leader Omar Ayub Khan warned that the country's debt is vulnerable to fluctuating interest rates, oil prices, and the volatile political climate in the Middle East and Ukraine, creating a new "perfect storm" for the economy.
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