Pakistan Seeks $4.9 Billion More In Loans After Missing Growth Target
Islamabad:
The Pakistan government is reportedly planning to borrow USD 4.9 billion from international banks to meet its external financing needs and strengthen its foreign exchange reserves. This comes after the International Monetary Fund, earlier this month, authorised the "immediate disbursement" of a billion-dollar bailout to the South Asian nation's troubled economy.
Islamabad's strategy is to secure USD 2.64 billion in short-term loans from international commercial banks at expected annual interest rates between 7 per cent and 8 per cent without strict conditions or performance benchmarks, according to a report by ARY News.
Additionally, the government is seeking USD 2.27 billion through long-term borrowing arrangements from commercial banks, the report said.
As part of the plan, Islamabad is reportedly in touch with 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. Moreover, a commercial guarantee is also being sought for a USD 500 million loan from the Asian Development Bank (ADB), according to a report by news agency ANI.
The additional funding is reportedly part of Islamabad's broader strategy to meet Pakistan's external financing needs, which are driven by large debt repayment obligations and limited access to global capital markets, as well as to strengthen its foreign exchange reserves.
The International Monetary Fund (IMF) has set a goal for Pakistan to advance its reserves to $13.9 billion by the end of June, with the country's State Bank currently holding a reserve of approximately $14 billion, which is enough to cover three months of imports.
Pakistan Fails To Meet Economic Target
The Pakistani federal government has reportedly fallen short of its economic growth target for the fiscal year 2024-25, achieving a growth rate of just 2.68 per cent against a projected 3.6 per cent, ARY News reported on Tuesday, citing sources from Pakistan's National Accounts Committee.
This was reportedly revealed during a National Accounts Committee meeting in Islamabad, chaired by the Secretary Planning.
The report said that Pakistan'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. Notably, the services sector posted a strong growth of 39 per cent between July and March, as per ARY News.
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