Pakistan is facing a daunting challenge of repaying a whopping $100 billion external debt over the next four years, almost 10 times its current foreign exchange reserves. Minister of State for Finance Ali Pervaiz Malik revealed this at a recent meeting, emphasizing the need for viable strategies to manage this immense debt burden. The government’s current approach involves requesting annual deferments from lenders, highlighting the lack of a concrete repayment plan.
Rollovers from countries like Saudi Arabia, China, UAE, and Kuwait have been crucial for managing the debt, but this strategy is proving unsustainable. The delay in securing an IMF board meeting date due to rollovers has further complicated the situation. While an IMF program worth $7 billion has been approved, there is still a significant financing gap to address.
The Opposition has raised concerns about Pakistan’s debt exposure to interest rate risks, oil price fluctuations, and geopolitical uncertainties, warning of potential economic instability. As the country navigates this financial challenge, a coherent and sustainable debt management plan is paramount to secure its economic stability.
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