No growth, just loans: Pakistan seeks $4.9 billion from world after securing IMF deal
Pakistan's economy grew by just 2.68% in the fiscal year 2024-25, falling short of its target of 3.6%, according to a report by ARY News. The report came after a meeting of the National Accounts Committee, led by the Secretary of Planning.According to ARY News, the report was revealed during a meeting of the National Accounts Committee, chaired by Pakistan's Secretary of Planning. The meeting revealed that the country's economic output reached USD 411 billion, with per capita income increasing to USD 1,824. Sector-wise performance varied, with agriculture growing by 1.8 per cent during the first three quarters, while the industrial sector declined by 1.14 per cent.advertisementNotably, the services sector posted a strong growth of 39 per cent between July and March, as per ARY News. In parallel, Pakistan is preparing to raise USD 4.9 billion in external commercial financing for the next fiscal year (FY2025- 26), according to sources familiar with the matter. As part of its financing plan, the government intends to secure USD 2.64 billion in short-term loans from commercial banks at expected interest rates of 7-8 per cent, without strict conditions or performance benchmarks, as per ARY News. An additional USD 2.27 billion is also expected to come through long-term borrowing arrangements from commercial banks. Efforts are underway to tap four major international banks. This includes a proposal to obtain USD 1.1 billion from the Industrial and Commercial Bank of China (ICBC), along with USD 500 million each from Standard Chartered Bank and Dubai Islamic Bank. advertisementMeanwhile, the International Monetary Fund (IMF) has set a goal for Pakistan to increase its foreign reserves to USD 13.9 billion by the end of June. The State Bank of Pakistan currently holds around USD 14 billion, which is enough to cover three months of imports.This month, Pakistan's central bank cut its key policy rate by 100 basis points to 11%, citing an improved inflation outlook and resuming a series of cuts from a record high of 22%, following a brief pause in March, to support growth.The latest national accounts aggregates for fiscal 2024/25 showed the size of the economy at 114.7 trillion rupees ($410.96 billion) up from 105.1 trillion rupees ($ 371.66 billion), the committee said.Pakistan's manufacturing sector growth slowed to a seven-month low in April, with the HBL Pakistan Manufacturing Purchasing Managers' Index (PMI) easing to 51.9 from 52.7 in March, weighed by concerns over global trade.With inputs from ANI, ReutersTune InMust Watch
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