Islamabad:Cash-strapped Pakistan is facing the daunting task of repaying a staggering USD 100 billion external debt over the next four years, the government has said, an amount which is nearly 10 times its current USD 9.4 billion foreign exchange reserves.
The USD 100 billion external debt repayments from 2024 to 2027 are exclusive of any payments on account of the liabilities booked on the balance sheet of the central bank and the requirements for financing the current account deficit, according to a Friday report.
"Pakistan's external debt repayments for four years are USD 100 billion," Minister of State for Finance Ali Pervaiz Malik said at a meeting of the National Assembly Standing Committee on Thursday.
However, "the debt stock can easily be financed through rollovers or replacement of the existing debt with new one," Malik was quoted as saying by the newspaper.
Malik's statement underscores that the government does not have a viable plan of paying back these loans except to request the lenders every year to defer the payments for one more year, it said.
The USD 100 billion external debt repayments by the federal government are 10 times more than the current USD 9.4 billion gross official foreign exchange reserves, the paper said.
Director General Debt, Mohsin Chandna, told the Committee that the rollovers are mainly from Saudi Arabia (USD 5 billion), China (USD 4 billion), UAE (USD 3 billion) and Kuwait (USD 700) million.
The government's strategy to remain afloat by securing the rollovers has already started backfiring and also led to a significant delay in securing the International Monetary Fund (IMF) board meeting date, according to the paper.
The International Monetary Fund (IMF) board is now scheduled to approve a 37-month Extended Fund Facility programme worth USD 7 billion to Pakistan on September 25 after these creditors finally assured to roll over the debt but only for one year.
Meanwhile, Finance Minister Muhammad Aurangzeb told the Committee that despite signing a USD 7 billion International Monetary Fund (IMF) new programme, Pakistan's external financing requirements were still not fully met. The IMF has identified a USD 5 billion financing gap for the 2024 to 2026 period, he said.
According to Omar Ayub Khan, the leader of the Opposition in the National Assembly, Pakistan's debt profile is exposed to interest rate risks and fluctuation in crude oil prices. There may also be pressure on rupee-dollar parity due to the political situation in the Middle East and Ukraine and a new perfect storm is gathering again, he said.
