Ahmed Mukhtar Naqshbandi
ISLAMABAD/KARACHI: Amid Pakistan’s efforts to dodge the imminent risk of default, the country is due to repay foreign debt and interest worth almost $22 billion over the next 12 months, the local media reported on Wednesday.
The dollar-strapped country, upon successful resumption of the International Monetary Fund programme, is expected to start talks with the creditors to restructure the foreign debt. The debt obligations currently stand significantly higher than the inflows the country expects to receive in the coming years.
The State Bank of Pakistan (SBP) data suggests that the country is to repay a total debt of $21.95 billion in one year; $19.34 billion in principal, and another $2.60 billion in interest on the total debt.
According to the data shared by the Pak-Kuwait Investment Company (PKIC), the central bank has projected no foreign debt inflows for the next one year. The breakdown of the data shows that the country is to pay off $3.95 billion within one month. It is due to return $4.63 billion in the next three months, and will have to repay another $13.37 billion in the last eight months of the period under review.
Pakistan to repay foreign debt worth $80bn by June 2026
Pakistan is to pay back around $80 billion in foreign debt over the next three-and-half years (from February 2023 until June 2026). On the contrary, the country’s foreign exchange reserves have depleted to an alarming level of less than a three-week import cover at $3.1 billion at present.
The fiscal tightening and the impact of rupee depreciation is likely to keep inflation high – likely to rise above 30 percent over the next few months and average at 27 percent in FY23.
