By Monitoring Desk
ISLAMABAD: Pakistan is seeking up to $4 billion from Middle Eastern commercial banks by next fiscal year to bridge external financing gaps, central bank Governor Jameel Ahmad said.
The country is also in advanced stages of securing $2 billion in additional external financing needed for International Monetary Fund (IMF) approval of the $7 billion bailout program, Ahmad said in an interview to Reuters.
Pakistan and the IMF reached a staff-level agreement on the loan programme in July, subject to approval from the lender’s executive board and it obtaining “timely confirmation of necessary financing assurances from Pakistan’s development and bilateral partners”.
Gross financing needs will be “smoothly met” in the next fiscal year and medium term, Ahmad said, citing expected assurances from development and bilateral partners.
In the past, Pakistan has relied on long-time allies such as China, Saudi Arabia and United Arab Emirates to ‘rollover’ debt rather than force a repayment crunch.
Ahmad said he expected similar assurances would be given for the next three years, giving the government more time to get its finances in order.
In addition, Ahmad said the central bank reckoned Pakistan’s gross financing needs for the coming years would be lower than the 5.5 percent of gross domestic product projected by the IMF in its latest country report in May.
“Pakistan’s external gross financing needs have been declining in the past few years,” he said.
“Since (the IMF’s) assessment was based on a higher current account deficit than realized in fiscal 2024 and now projected for the next few years, we assess the ratio of gross financing needs to GDP to be lower than the 5.5 percent level.”
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