Pakistan’s external public debt rises by .2 billion in six months

Connie Queline

Pakistan’s external public debt rises by $1.2 billion in six months

NEW DELHI: The first quarterly report on Foreign Economic Assistance of the current fiscal year released by the ministry of economic affairs of Pakistan on Wednesday revealed that cash-strapped nation‘s external public debt has surged by dollars 1.2 billion in six months to reach dollars 86.358 billion as of September 30, 2023
According to the report, the World Bank and China have emerged as the largest contributors to the total disbursement of Pakistan’s external debt.During July-September 2023, Pakistan received a total of dollars 3.5 billion in foreign inflows, resulting in a net inflow of dollars 1.97 billion after accounting for loan repayments of dollars 1.5 billion.
The external public debt as of March 31, 2023, amounted to dollars 85.18 billion. In comparison, the country had received dollars 2.2 billion in loans and repaid dollars 2.06 billion during the same period last fiscal year (July-September 2022), leading to a net addition of dollars 142 million.
The report highlights that 64% of the total external public debt was obtained from multilateral and bilateral sources with concessional terms and longer maturity.
However, Pakistan faced challenges in securing international bonds and commercial loans due to adverse market conditions caused by a poor credit rating and unaffordable interest rates, according to the report.
It is notable that dollars 3.538 billion received as Foreign Economic Assistance is in addition to dollars 1.2 billion released by the International Monetary Fund (IMF) as the first tranche of the dollars 3 billion Stand-By Arrangement (SBA) and dollars 1 billion provided by the United Arab Emirates, which is separately accounted for by the State Bank of Pakistan.
Among the contributors to the total disbursements, the World Bank and Islamic Development Bank contributed dollars 306 million and dollars 100 million, respectively, as multilateral development partners. On the bilateral side, China played a significant role by disbursing dollars 509 million, followed by dollars 300 million from Saudi Arabia for the import of oil and petroleum products.
Earlier, the new appointed Prime Minister wasted no time to order immediate talks with the International Monetary Fund (IMF) for an extended fund facility, emphasizing the urgency to improve the country’s economic state.
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