ISLAMABAD: On the back optimism fuelled by UAE’s rolling over of $2 billion loan, Caretaker Prime Minister Anwaarul Haq Kakar on Friday reached out to his Chinese counterpart Li Qiang, ‘seeking’ rollover of $2 billion loan.
The maturity of China safe deposit is due on March 23, 2024.
In a letter to the Chinese premier, the caretaker PM formally requested Li Qiang to rollover the $2 billon loan for another year, on the same terms and conditions.
PM Kakar appreciated the support extended by the Chinese government to ease the burden of foreign debts of Pakistan.
Pakistan has acquired safe deposits of $4 billion from China to address the balance of payments crisis in 2023.
According to officials, the Finance Ministry has been in touch with the Chinese officials for timely rollover of the loan. The officials expressed the Islamabad’s optimism that the Chinese government would rollover the loan.
Earlier, in July 2023, Chinese EXIM Bank had rolled over $2.4 billion loan for 2 years to help its iron-clad friend shore up its foreign reserves to avoid balance payment crisis.
On January 17, the United Arab Emirates (UAE) had rolled over $2 billion for one year following a request by Caretaker PM Kakar to President Mohammad bin Zayed al Nahyan. The $2 billion loan was scheduled to mature in the current month of January.
The caretaker premier had addressed a letter to the UAE President, seeking rollover of the loan.
Last week, Pakistan received $700 million as second tranche under Stand-By Arrangement (SBA) from the International Monetary Fund (IMF). The global lending agency disbursed the second tranche following approval of the first review of the $3 billion loan programme by its board.
On the other hand, experts say Pakistan would be requiring more than $27 billion for debts servicing till November, 2024.
Though IMF has lauded the Pakistan’s performance and collection of the highest-ever tax in FY2023-24, it will a herculin task to arrange for such a huge debts repayment.
So far performance of the Federal Board of Revenue shows that it would be able to collect Rs9.4 trillion revenue, which would be the high-ever tax collection.
Furthermore, the IMF has forecast tax collection of Rs11.5 trillion in the next fiscal year 2024-25. The lender is hopeful that Pakistan will collect Rs4803 billion in direct taxes and Rs4114 billion on account of sales tax.
