Pakistan, after securing a $7 billion bailout package from the IMF, is now in talks with China to reprofile billions in debt to support economic reforms. With proposals to delay energy sector debt and extend cash loan facilities, Islamabad aims to renegotiate agreements with Chinese power producers to reduce electricity prices. The China-funded Pakistan China Economic Corridor (CPEC) has poured billions into infrastructure projects, but the high Chinese debt of $26.6 billion poses challenges.
Experts believe that the initial CPEC loans were costly and poorly negotiated, leading to economic struggles for Pakistan. While Islamabad and Beijing defend CPEC as an opportunity for growth, concerns remain over the heavy debt burden. As Islamabad balances loans from China and the IMF, the pressure to repay Chinese debt remains.
Despite the temporary relief from reprofiling debt, the long-term implications of CPEC loans on Pakistan’s economy are concerning. With China’s rivalry with India in play, the future of Pakistan’s debt repayment to China remains uncertain. As Pakistan navigates its debt dilemma, the impact of CPEC loans continues to be a topic of debate among experts.\
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