October 22, 2020

Pakistan Needs $25.5 Billion In Financing For FY-19, Says IMF

The IMF released a staff-level report on Monday, July 8, 2019. According to the assessments made in the report, Pakistan would require $25.5 billion financings in the FY-19. The report calculated the inflows to be around $30 billion and also said that the remaining $4 billion would be used to build foreign reserves.

The Asian Development Bank (ADB) has also agreed to provide Pakistan $10 billion in five years, starting from 2020 to 2024. The ADB said that it would disperse $2 billion per anum for the next five years.

Pakistan has secured other means of financing for the FY-20, which include;

  • $6.3 billion in loans from China
  • $6.2 billion from Saudi Arabia
  • $1.3 billion from the World Bank
  • $1 billion loans from UAE

Pakistan has been relying on foreign financing for years now as the exports of the country are not increasing and the servicing of the previous loans put a lot of pressure on the country’s currency.

The report said that Pakistan would require $6.7 billion to cater for the current account deficit and would require a further 18.2 billion to repay the previous loans.

$14.4 billion public sector debt and $3.7 billion private sector debt will mature this year. Pakistan will pay back $2.1 billion short term loans and $11.4 billion long term loans this year.

On the other side, the external inflows are expected to be around $29.9 billion, which include $2.3 billion from the IMF and $2 billion in foreign direct investments.

The additional external inflows will be used to build foreign reserves of Pakistan, which currently stand at $17,397.6 million. The report estimates Pakistan’s foreign reserves to be at around $11.1 billion by the end of the current fiscal year.

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