The central bank of Pakistan, which has cash on hand, has announced that it will repay a total of USD 30.35 billion in repaid foreign debt and interest payments in 12 months ( August 2024 to July 2025 ), including those significant loans that bilateral creditors annually roll over.
The State Bank of Pakistan ( SBP ) data, cited by a JS Global report, showed that the payments from August 2024 to July 2025 include significant loans that bilateral creditors roll over annually. According to The Express Tribune, Pakistan is scheduled to pay off a balance of USD 26.48 billion in revolving foreign debts over the next two years, plus an additional USD 3.86 billion in interest charges.
Pakistan’s repayments and interest payments are fully secured for the 37-month loan period under the most recent USD 7 billion IMF Extended Fund Facility ( EFF). Due to the expansion of Pakistan’s market in FY24 compared to the recession in FY23, the unusual debt-to-GDP percentage has decreased from 27.6 % in August of the previous month to 20.2 per share in August 2024.
The information highlights the need for financial managers, planners, and parliamentarians to look into ways to boost international income and lower outside expenditures given the rising rate of annual foreign loan repayments and interest payments. Compared to the USD 21.2 billion ( including rollovers ) paid by Pakistan over the past 12 months ( August 2023 to July 2024 ), the current 12-month period’s repayment and interest payment sum of USD 30 billion is significantly higher, according to JS Global.
The rise in interest and payment for the upcoming 12 weeks can get attributed to new funding from Saudi Arabia, the UAE, and the IMF in late June and July 2023, which totaled about USD 4 billion, as well as an extra USD 2 billion that the IMF lent between August 2023 and April 2024. In the upcoming years, these loans have increased the repayment pressure ( including significant rollover ).
Topline Research, citing the latest IMF documents, reported that Pakistan’s gross external financing requirement has dropped to a 9-year low of USD 18.8 billion ( excluding expected rollovers and contained current account deficit ) for the ongoing fiscal year ( July 2024 to June 2025 ). Another researcher noted that Pakistan is also anticipated to add additional foreign loans in the current fiscal year ( FY25 ) worth between USD 3 billion and USD 4 billion.
A second researcher emphasized the necessity for Pakistan to switch to imported products to reduce its additional costs. According to The Express Tribune, implementing such steps may enhance the nation’s ability to receive additional payments and boost foreign exchange reserves.
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