In the first quarter of the current fiscal year, Pakistan has spent $2.4 billion towards servicing its external public debt, amidst the challenges posed by its declining foreign exchange reserves.
This financial maneuvering was detailed in an official report covering the period from July to September 2023-24, highlighting the government’s efforts to manage its international financial obligations.
According to the report, the total expenditure of $2,404 million on debt servicing includes principal repayments amounting to $1,627 million and interest payments of $777 million.
A significant portion of this repayment, $524 million, was directed to the International Monetary Fund (IMF), underscoring the country’s commitments to its major creditors.
Other notable repayments include $331 million to the World Bank, $283 million to the Asian Development Bank (ADB), and $108 million to the Islamic Development Bank (IsDB).
Bilateral creditors also received substantial repayments, with Saudi Arabia receiving $407 million, China $210 million, Japan $26 million, and Non-Paris Club countries receiving $186 million in both principal and interest payments.
Additionally, the government repaid $190 million to other creditors and made interest payments totaling $139 million on international bonds and to commercial banks.
Despite these significant outflows, the Government of Pakistan has continued to secure new funding agreements.
During the same quarter, new agreements valued at $642 million were signed, primarily for project financing (69%), programme financing (15%), and commodity financing (16%), aimed at mitigating the impacts of the 2022 floods.
Disbursements totaling $3,536 million were received, with major contributions from the World Bank, IsDB, China, and Saudi Arabia.
As of September 30, 2023, Pakistan’s total external public debt stood at $86,358 million.
The first quarter’s debt servicing activities resulted in net transfers to the government’s external public debt, showcasing a positive balance of $1,869 million, as Pakistan continues to navigate its economic challenges through strategic financial management.
