ISLAMABAD: The government has failed to meet its debt targets for the current financial year.
Due to non-improvement of credit rating by international credit rating agencies, Pakistan could only get loans of 9.7 billion dollars during the first 9 months of this fiscal year, which is less than half of the estimate made for this fiscal year. It is more.
Despite the successful completion of the IMF loan program due to the lack of credit rating improvement, the current fiscal year will end without a sovereign international bond issue or a major debt acquisition in the Western markets, leading to Despite obtaining foreign debt of $9.7 billion and buying billions of dollars from the local market, the foreign exchange reserves are only $8 billion.
The government also paid off a $1 billion Eurobond this month.The government had estimated it would borrow $18 billion for the current fiscal year to meet its foreign financing needs, but weak credit ratings and high interest rates. The government has so far been unable to issue Eurobonds or raise any new commercial debt.
Finance Minister Muhammad Aurangzeb expressed the hope of getting a big foreign loan during the next financial year and said that during the current financial year panda bonds worth 250 million to 300 million dollars can be issued in the Chinese market.
Talking about the credit rating, he said that Pakistan has successfully completed the IMF program but the credit rating agencies are still waiting for stabilization.
According to data released by the central bank, the government borrowed only $204 million in March, compared to $657 million in the last nine months compared to the Asian Development Bank’s estimate of $2.1 billion for the current fiscal year. Given that the Ministry of Finance and the Ministry of Economic Affairs had set unrealistic targets while preparing the budget, the 2022 flood relief fund announced in Geneva has not been achieved.
The World Bank has provided $1.43 billion during the nine months, while the estimate was $2.3 billion. An additional $1.1 billion is expected from
The Islamic Development Bank has provided only $200 million against an estimate of $500 million, the government has also failed to secure a $4.5 billion commercial loan and a $600 million Chinese loan, which China has used for Chinese power plants. Conditional on payment of dues, which have reached an all-time high of Rs 490 billion, China’s trade debt of $1 billion is maturing in June, which Pakistan is trying to roll over.
