Authorities in Islamabad have budgeted Rs5.685 trillion or over $20.3 billion to be acquired through external financing for the fiscal year 2024-25, showed the Finance Bill 2024.
As per the documents released as part of the Budget 2024-25 announcement, the government has budgeted foreign loan repayments to the tune of Rs4.99 trillion or nearly $18 billion in the coming fiscal, while Rs29.95 billion will be paid off of short-term credits.
However, it did not provide a breakdown of the source of external financing.
Consequently, net external sources the government seeks for the coming fiscal amount to Rs666.338 billion or $2.5 billion.
The federal government earlier today announced the budget for the next fiscal year FY2024-25, with a total budgeted outlay of Rs18.9 trillion, up 30% compared to the budgeted outlay of FY24.
Earlier, Finance Minister Muhammad Aurangzeb, while presenting the Economic Survey 2023-24 on Tuesday, had sounded a confident tone, saying that Pakistan will meet its external debt obligations in the coming fiscal year, amid reports that the country’s requirements surpass its current level of foreign exchange reserves.
“On the external finance side, once the International Monetary Fund (IMF) programme is in place, I don’t see that as a big challenge,” said Aurangzeb.
The State Bank of Pakistan (SBP) in its post-Monetary Policy Committee (MPC) briefing said in FY24 the total external debt to be serviced amounted to $24.3 billion with $3.9 billion allocated for interest payments and the remaining $20.4 billion as principal repayments.
Earlier this year, it was reported that Pakistan plans to seek a new loan of at least $6 billion from the International Monetary Fund (IMF) to help the government repay billions in debt due this year.
Last summer, Pakistan averted default thanks to a nine-month Extended Fund Facility (EFF) inked with the global lender, the programme expired in April and the government initiated negotiations for a long-term arrangement to keep the South Asian country’s economy afloat.