Pakistan likely to get additional loan of $2.57b

Country's current account deficit likely to be $9.28 billion, says report

ISLAMABAD:

The International Monetary Fund (IMF) has said that Pakistan is likely to receive an additional $2.57 billion in external debt during the current fiscal year 2022-23.

According to the IMF report, Islamabad needs financing of $30.75 billion in the current financial year — equivalent to 8.4 percent of GDP — and is likely to receive $16.61 billion in commercial loans.

It said that Pakistan will get $14.39 billion from other institutions besides the IMF, direct foreign investment of $2.16 billion is also expected.

According to the report, the country's short-term debt of $12.83 billion is likely to roll over.

Meanwhile, the foreign exchange reserves will reach $16.20 billion in the current fiscal year, while the current account deficit is likely to be $9.28 billion.

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Pakistan will seek rollover of loans worth $12,832 billion out of which the public sector rollover from friendly countries would be standing at $9.54 billion and private sector $3.287 billion. Other net dollar inflows are projected to be at $161 million.

The remaining financing needs stand at $2.577 billion, but the IMF is going to provide over $3.828 billion as after augmentation of Extended Fund Facility, Islamabad would get additional $966 million.

The IMF has projected that the gross official reserves position would touch $16.2 billion till the end of June 2023.

“Nonetheless, financing risks remain exceptionally high arising from large public sector external rollover needs, the still sizable current account deficit, difficult external environment for Eurobond issuance given recent downgrades and high spreads, and limited reserve buffers to help cover the financing needs in case of delays in scheduled inflows,” the staff report warned.