Pakistan to Repay USD 30 Billion Debt in FY25
Oct 14, 2024 12:07
Pakistan's central bank reveals the country will repay USD 30.35 billion in foreign debt and interest in FY25. This includes maturing foreign debt and interest payments. The country's foreign debt-to-GDP ratio has decreased, but repayments are rising.
Islamabad, Oct 14 (PTI) Pakistan's central bank has said the country is scheduled to repay a total of USD 30.35 billion in maturing foreign debt and interest payment in this financial year even as the foreign debt repayments and interest payments are rising every passing year, a media repot said on Monday.
The payments over the 12 months from August 2024 to July 2025 include those significant loans which bilateral creditors roll over every year, reported the Express Tribune quoting a JS Global report, which, in turn, cited data from the State Bank of Pakistan (SBP).
The report showed that Pakistan is to repay maturing foreign debt worth USD 26.48 billion and pay another USD 3.86 billion on account of interest expense in the period.
Pakistan's repayments and interest payments are fully secured under the latest USD 7 billion IMF Extended Fund Facility (EFF) through the loan period of 37 months.
In terms of debt-to-GDP ratio, however, the foreign debt has dropped to 20.2 per cent in August 2024 from 27.6 per cent in the same month of the last year, as the nation's economy expanded in FY24 compared to contraction in FY23.
The data, however, pointed out the foreign debt repayments and interest payments are rising every passing year, emphasising upon the government economic managers, planners and parliamentarians to find ways to increase foreign income and cut external expenditures.
The latest data suggests the sum of USD 30 billion is notably high compared to USD 21.2 billion (including rollovers) the country paid over the past 12 months (August 2023 to July 2024), according to the research house, JS Global.
The jump in sum of repayments and interest payments for the ongoing 12 months was recorded after Saudi Arabia, UAE and IMF provided fresh loans worth around USD 4 billion in late June and July 2023 and IMF lent another USD 2 billion between August 2023 and April 2024, mounting the repayment pressure (including significant rollover) in the years to come.
Citing the latest IMF documents, Topline Research, however, reported the country'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).
However, Pakistan is also estimated to add up fresh foreign loans to the tune of USD 3 billion to USD 4 billion in the ongoing fiscal year (FY25), another researcher said.
A third researcher said Pakistan also has to cut its external expenditures through import substitution. Such remedies would help improve the nation's capacity to make external payments and boost foreign exchange reserves, according to The Express Tribune report.
DISCLAIMER - This article is from a syndicated feed. The original source is responsible for accuracy, views & content ownership. Views expressed may not reflect those of rediff.com India Limited.
You May Like To Read