Pakistan to pay Rs1,620 billion in interest payments in 2018-19

ISLAMABAD: Pakistan will pay Rs1,620 billion in interest payments for the next fiscal year 2018-19 against the estimates of borrowing loans from external and internal sources.

Documents show that Pakistan will pay Rs1,391 billion as interest to domestic banks and Rs229 billion to foreign institutions in 2018-19.

The government has paid Rs1,526 billion as the interest payment to both domestic and foreign lenders during the ongoing year 2017-18. An amount of Rs1,332 billion paid in servicing of domestic and Rs194 billion of foreign debt.

In addition to this, Pakistan has to repay an amount of Rs21,905 billion to domestic and foreign lenders in the upcoming year.

The country will repay Rs21,129 billion to those domestic banks and other institutions from which the government took loans in previous years. Meanwhile, an amount of Rs601 billion will repay to foreign lenders including countries and institutions.

Furthermore, the finance ministry will repay Rs174 billion on short-term foreign credits in the next fiscal year.

The government had paid Rs23,448 in the ongoing fiscal year as a huge amount of Rs22,928 billion paid to domestic sources, Rs428 billion to foreign countries as well as institutions like ADB, WB, etc and an amount of Rs93 billion under the head of short-term foreign credits.

Documents indicate that the government has estimated to borrow an amount of $11.6 billion from external sources such as from bilateral, multilateral, euro bond and commercial banks in the next fiscal year 2018-19.

“Total inflows of external financing are expected to be $11.6 billion during 2018-19 with project loans of $4.8 billion and programmer loans of $1.8 billion” document stated.

The government will borrow $3.1 billion from countries like Germany, China, Japan, America, Saudi Arabia and others and $3.5 billion from multilateral sources. The government is estimated to collect $3 billion from raising bonds and $2 billion from commercial banks.

While addressing a post-budget press conference on Saturday, the newly-appointed finance minister Dr Miftah Ismail informed that Pakistan has secured financing of $1 billion but he did not disclose the name of the country.

Pakistani reserves have decreased to $10,917 million during the week ending April 20, 2018. Pakistan’s economy has come under pressure with external account worries remaining the focus of economic managers which is why the government was lobbying for more loans from a friendly country in order to cover the three-month import bill.

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