Poor Pakistan will be crippled, its debt will be 10 times its foreign exchange reserves; how will it be compensated?

Pakistan Finance Minister Mohammad Aurangzeb said that despite signing a new $7 billion International Monetary Fund (IMF) program, the country will not be able to meet its external financial needs.

Pakistan Economic Crisis: Pakistan's financial situation may worsen in the coming four years. The country will have to repay an external debt of $100 billion, which is many times more than the current foreign exchange reserves. Pakistan's Deputy Finance Minister Ali Parvez Malik said that Pakistan will have to repay $100 billion to external lenders in the next four years. According to the Express Tribune report, the external debt on the Pakistani government is about 10 times more than the country's current foreign exchange reserves of $9.4 billion.

Getting a new loan of 7 billion dollars from IMF

Pakistan is planning to rollover and restructure to repay external debt due to poor financial condition. Pakistan's Finance Minister Mohammad Aurangzeb said that despite signing a new $7 billion International Monetary Fund (IMF) program, the country will not be able to meet its external financial needs. According to the Express Tribune report, Aurangzeb told Pakistan's Standing Committee on Finance that the IMF has found a funding gap of $5 billion from 2024 to 2026.

The report also claimed that Ali Pervez Malik also tried to avoid the question whether the government was considering debt restructuring. Apart from this, the report claimed that the $100 billion external debt from spring 2024 to 2027 is separate from any payment for

liabilities in the balance sheet of Pakistan's central bank and the financing of the country's current account deficit. Based on the current situation and Ali Pervez Malik's statement, it has come to light that the Pakistan government has no plan to repay these loans.

The only way to get loan restructuring left

for Pakistan at present is to request its international lenders to restructure its loan for one more year. The report also claimed that Director General of Debt Mohsin Chandna told the Standing Finance Committee that the amount due for the financial year 2024-25, Pakistan's external debt has reached $ 18.8 billion, which does not include the repayment of the loan of the responsibility of the central bank.

In response to a question, Minister of State for Finance MNA Nafisa Shah said that the $18.8 billion will be paid in the same way as has been done in previous years. Chandana said that Pakistan is trying to rollover (extend the period of loan), which includes a total of $100 billion. This includes loans of $5 billion from Saudi Arabia, $4 billion from China, $3 billion from UAE and $700 million from Kuwait.