Pakistan will have to repay a staggering $100 billion in external debt over the next four years, a challenge that the government plans to address mainly through rollovers from bilateral lenders.
According to a news report, this was disclosed by Deputy Finance Minister Ali Pervaiz Malik during a meeting of the National Assembly Standing Committee on Finance. The amount is nearly ten times larger than the current foreign exchange reserves of $9.4 billion.
For the fiscal year 2024-25 alone, external debt repayments are projected to be $18.8 billion.
Malik’s statement followed earlier comments by Finance Minister Muhammad Aurangzeb, who acknowledged that despite securing a new $7 billion International Monetary Fund (IMF) programme, Pakistan’s external financing needs are still unmet. The IMF has identified a $5 billion financing gap for the 2024-2026 period, further complicating the country’s financial outlook.
During the meeting, Pakistan People’s Party (PPP) MNA Nafisa Shah questioned the government’s strategy, asking whether there was any plan beyond rollovers and whether debt restructuring was on the table.
Malik said that the government does not have a plan in place to pay back the loans outright, apart from requesting lenders to defer payments each year.
“The debt stock can be financed through rollovers or by replacing existing debt with new loans,” said Malik, adding that the government had already secured commitments from major lenders including Saudi Arabia, China, the UAE, and Kuwait for these rollovers.
The government’s reliance on rollovers has already led to delays in securing the next IMF Executive Board meeting, which is now scheduled to review Pakistan’s 37-month Extended Fund Facility (EFF) worth $7 billion next week. The IMF required firm assurances from creditors before proceeding with the programme.
