AGL 42.00 Increased By ▲ 0.50 (1.2%)
AIRLINK 128.70 Increased By ▲ 0.70 (0.55%)
BOP 6.45 Increased By ▲ 0.19 (3.04%)
CNERGY 4.16 Increased By ▲ 0.03 (0.73%)
DCL 8.42 Decreased By ▼ -0.02 (-0.24%)
DFML 40.75 Increased By ▲ 0.06 (0.15%)
DGKC 87.95 Increased By ▲ 0.05 (0.06%)
FCCL 34.45 Increased By ▲ 0.35 (1.03%)
FFBL 66.80 Increased By ▲ 0.47 (0.71%)
FFL 10.54 Decreased By ▼ -0.02 (-0.19%)
HUBC 108.75 Increased By ▲ 0.05 (0.05%)
HUMNL 14.75 Increased By ▲ 0.29 (2.01%)
KEL 4.90 Increased By ▲ 0.25 (5.38%)
KOSM 7.61 Increased By ▲ 0.28 (3.82%)
MLCF 43.00 Increased By ▲ 0.28 (0.66%)
NBP 61.50 Increased By ▲ 0.66 (1.08%)
OGDC 178.90 Decreased By ▼ -0.07 (-0.04%)
PAEL 25.89 Increased By ▲ 0.19 (0.74%)
PIBTL 6.10 Increased By ▲ 0.04 (0.66%)
PPL 147.01 Increased By ▲ 0.86 (0.59%)
PRL 24.80 Decreased By ▼ -0.11 (-0.44%)
PTC 16.20 Increased By ▲ 0.06 (0.37%)
SEARL 70.85 Increased By ▲ 0.65 (0.93%)
TELE 7.35 Increased By ▲ 0.13 (1.8%)
TOMCL 36.35 Increased By ▲ 0.15 (0.41%)
TPLP 7.81 Decreased By ▼ -0.03 (-0.38%)
TREET 15.80 Increased By ▲ 0.21 (1.35%)
TRG 51.98 Increased By ▲ 1.62 (3.22%)
UNITY 27.20 Increased By ▲ 0.30 (1.12%)
WTL 1.25 Increased By ▲ 0.01 (0.81%)
BR100 9,838 Increased By 43.1 (0.44%)
BR30 29,913 Increased By 265.6 (0.9%)
KSE100 92,506 Increased By 484.6 (0.53%)
KSE30 28,795 Increased By 130.5 (0.46%)

There have been a number of queries about my estimate of external financing requirements of Pakistan at $32 billion. This figure has also been quoted with reference to me in an Editorial of the Business Recorder. This estimate was given by me was in response to a question asked at a seminar held recently at Lahore organized by SDPI/FES.
The clarification is as follows:
(i) External financing requirement is defined as the current account deficit plus the repayment of external debt during a particular period. This is also the definition by the IMF.
(ii) The $32 billion is for the next 16 months, as asked for by the questioner. In effect, it will be $2 billion per month. For example, the external financing requirement during the month of November was $ 1.83 billion.
(iii) It includes a current account deficit of $21.3 billion over the next sixteen months and repayment of debt of $10.7 billion during this period. It effectively corresponds to an annual financing requirement of $24 billion.
(iv) The external financing requirement should not be confused with the financing gap. The latter is the amount of external financing requirement which remains after receipt of external loans, FDI, FPI, and swaps. In effect, the financing gap corresponds to the extent to which pressure is put on the foreign exchange reserves.

Comments

Comments are closed.