Pakistan to 'Request' Extension of $12 Billion Loan from Allied Nations

 

Pakistan Seeks Loan Extension from Friendly Nations to Bridge Funding Gap

Pakistan's Ministry of Finance has revealed plans to request a $12 billion loan extension from allied countries to address its financial needs for the upcoming fiscal year (2024-25). This move comes as the nation grapples with a Rs23 billion external financing gap.

The breakdown of the requested extension highlights reliance on key partners: $5 billion from Saudi Arabia, $4 billion from China, and $3 billion from the United Arab Emirates. Pakistan hopes to secure these extensions to bolster its financial standing.

Furthermore, the budget incorporates plans to seek fresh financing from established institutions like the World Bank and the Asian Development Bank. Diversifying its funding sources could offer Pakistan greater financial flexibility.

In a separate development, news emerged on May 2nd that the Pakistani government is racing to finalize budget targets for the 2024-25 fiscal year. This urgency stems from an impending visit by an International Monetary Fund (IMF) delegation arriving in Islamabad on May 15th.

The IMF mission's visit signifies potential discussions surrounding a new loan program, a crucial step for Pakistan to secure additional financial support. To expedite this process, the Ministry of Finance has urged relevant ministries to swiftly finalize budget targets.

This flurry of activity underscores Pakistan's efforts to navigate its current financial landscape. By securing loan extensions and exploring new funding avenues, the nation aims to bridge its budget gap and potentially pave the way for a new IMF loan program.