Pakistan's external debt skyrockets by $1.2 Billion in 6-month surge, Sending economic ripples through market
In a financial twist, Pakistan finds itself grappling with a notable surge in external public debt, witnessing an unprecedented increase of $1.2 billion over the past six months. The implications of this economic development cast a shadow on the nation's fiscal stability, triggering concerns among investors and international markets alike.
FollowPakistan's economy is on the front page of the news again due to an unprecedented crisis revolving around its financial operations. After the new government took over under the leadership of Shehbaz Sharif, Pakistan released the economic data for the third quarter of the current fiscal year.
The economic condition of the country has gotten far worse as the external debt of the nation has now skyrocketed to a whopping $1.2 Billion in a short frame of 6 months. The outstanding external debt of Pakistan now stands at $86.358 billion which it majorly owes to the World Bank and China.
The cash-strapped South Asian nation went on to receive a foreign cash inflow of $3.5 billion in the third quarter of the current fiscal year. Out of the $3.5 billion received, the government paid off certain debts and their interests thus recording an outflow of $1.5 billion and an inflow of $1.97 billion from the cash injection.
During the same period, the International Monetary Fund (IMF) also released a $1.2 billion loan amidst tough economic conditions. The World Bank and Islamic Development Bank are now the largest multilateral development partners while on the bilateral side, China has emerged as the largest loan provider ($509 million). Saudi Arabia was also not very far away as it contributed to Pakistan’s debt by $300 million which was taken for oil and petroleum product imports.
The new government of Pakistan under the leadership of Shahbaz Sharif has enormous challenges on the economic front. Due to the unfavorable financial climate, it would be harder for Islamabad to pull the country out of the financial free fall.
