Minister of State for Finance Ali Pervez Malik has stated that Pakistan must fulfill all the conditions set by the International Monetary Fund (IMF) to receive the next tranche of its loan.
Speaking at a meeting of the National Assembly’s Finance Committee, chaired by Syed Naveed Qamar, the minister highlighted the country’s daunting financial obligations, including the repayment of $100 billion over the next four years.
Malik explained that Pakistan’s foreign reserves have risen from $3 billion to $9 billion, but significant challenges remain.
He emphasised that the country must repay $18 billion in loans this year alone, and additional support from friendly nations is essential.
The current reserves include $8 billion in safe deposits, with $5 billion from Saudi Arabia, $4 billion from China, and $3 billion from the UAE.
Despite efforts to stabilize the economy, Malik noted that Pakistan’s local debt repayment period averages six months, while foreign debt repayment averages two-and-a-half years.
Efforts are underway to extend these repayment periods, and Malik expressed optimism that interest rates, which are currently high, will decrease in the future.
During the meeting, concerns were raised about Pakistan’s reliance on new loans to repay existing debt. The Finance Minister acknowledged that Pakistan’s revenue is insufficient to meet these obligations without borrowing but reassured that the government is working to reduce the debt burden.
The committee also discussed the impact of currency fluctuations on the economy, with Director General of Debt Management noting that a $5 increase in the dollar rate results in a $1 billion rise in the import bill.
The government, however, remains committed to achieving financial stability, and Malik affirmed that the IMF’s conditions would be met to ensure the release of the next loan tranche.
The Finance Minister also highlighted the global decrease in interest rates and the efforts to secure long-term loans from Saudi Arabia, China, and the UAE. He stressed that Pakistan is working toward economic stability and that fulfilling IMF conditions is key to ensuring continued financial support.
With looming debt repayments and ongoing economic challenges, Pakistan faces a critical juncture in its financial future, and the government’s actions in meeting international obligations will play a vital role in securing much-needed financial relief.