Pakistan is facing a big economic crisis with a high inflation rate of 36.4%. The country needs to repay $3.7 billion in external debt by June 30, 2022. The Fitch Rating official expects China to roll over a $2.4-billion loan that is due next month. Pakistan has been struggling to avoid default with the help of friendly countries and multilateral lending agencies, but the situation is expected to get more difficult in the coming years.
Pakistan’s GDP growth rate is expected to see a massive dip this fiscal year. The World Bank projection brought it down by 93.33% for 2022-23, at 0.4%. The IMF predicted that the country will grow by 0.5%, while ADB estimates said it is slated to grow by 0.6%. Pakistan’s foreign exchange reserve is historically low at $4.46 billion and can only import essential items for a month. The PKR to USD exchange rate is historically high at 283, and external debt is $126 billion.
The country needs to repay $77.5 billion in external debt from April 2023 to June 2026. The debt payments underscore the crucial need for Pakistan to resume its bailout program with the Washington-based lender that has been stalled since November last year.
