The government received just $426 million from foreign lenders in July, and an official report on the disbursement of foreign loans revealed on Tuesday that it was unable to get $9 billion in debt rollovers last month.
The Ministry of Economic Affairs released its monthly disbursement report, and it showed that no loans were obtained from bilateral creditors or international commercial banks—sources that the government is desperately attempting to access in order to obtain the foreign cash it needs to survive.
The International Monetary Fund (IMF) would not approve a $7 billion rescue package unless cash deposits from China, Saudi Arabia, and the United Arab Emirates are rolled over and additional loans from international commercial banks are raised.
As part of the federal government’s rollover plan, the Ministry of Economic Affairs has declared $5 billion in debt from Saudi Arabia and $4 billion in debt from China. Nonetheless, the central bank’s balance sheet includes the $3 billion UAE deposit.
No payments were made on these debts last month, according to the data.
The $7 billion scheme was supposed to be approved by the IMF on August 30, but it was postponed because the government couldn’t get the required rollovers.
This is the first formal acknowledgement that these transactions have not taken place.
The new Extended Fund Facility (EFF) from the IMF is predicated on Pakistan continuing to make its domestic and external debt repayments on schedule.
While the $4 billion commercial loan and the $12 billion cash deposit rollover are essential to the IMF’s objectives for debt sustainability, neither the government nor the IMF have addressed the urgent need for debt restructuring.
The government’s annual $19.2 billion overall borrowing plan does not include the $1.2 billion oil finance facility for the current fiscal year.
