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Pakistan

Pakistan faces $3.7bn debt payments in May, June: report

  • Fitch says base case is that Pakistan and IMF will reach an agreement on the programme review, but risks are large
Published May 5, 2023

Pakistan faces a total of $3.7 billion of debt payments starting this month, Fitch Ratings said, according to Bloomberg.

“About $700 million of maturities are due in May and another $3 billion in June,” Krisjanis Krustins, a Hong Kong-based director at Fitch, said in an emailed response quoted by Bloomberg.

Fitch expects $2.4 billion of deposits and loans from China will be rolled over, the report added.

The debt payments underscore the crucial need for Pakistan to resume its bailout programme with the International Monetary Fund (IMF) that has been stalled since November last year.

A successful staff-level agreement (SLA) for the 9th review will unlock a $1.1-billion tranche.

Currently, foreign exchange reserves held by the State Bank of Pakistan (SBP) are at $4.46 billion, barely enough for a month of essential imports.

“Our base case is still that Pakistan and the IMF will reach an agreement on the program review,” Krustins was quoted as saying.

However, the analyst warned that the risks are large and the rating cut in February reflected that a default or debt restructuring is an increasingly real possibility for Pakistan.

Last month, the IMF mission chief said the lender is looking forward to obtaining the necessary financing assurances as soon as possible to pave the way for the successful completion of the 9th EFF review, a statement that came after Pakistan secured $3 billion in fresh inflow from Saudi Arabia and the UAE.

Comments

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Mian Nawaz Sharif-Shit May 05, 2023 12:45pm
Default looms. Debt restructuring will wipe out Pak banks.
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Tulukan Mairandi (Salem) May 05, 2023 02:32pm
DEFAULT inevitable now. PROLONGING SERIAL MUST COME TO AN END. BEFORE ELECTIONS OR AFTER ELECTIONS, Its the matter of TIME.
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Nadeem May 05, 2023 03:30pm
@Tulukan Mairandi (Salem), o bahi khuda ka vasta hai bs kr de, last 3 maheenay se e ye roo rhe ho tm without any justification
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Mumtaz kashif May 05, 2023 04:33pm
Government and people of Pakistan should curtail use of imported and luxury items up to the lowest level. This will produce a lot more fiscal space for future financial betterment. Simple leaving major energy shifts and reducing dollar out flow is the best solutio
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Munawer Aijaz May 05, 2023 05:59pm
We Pakistani confident to came out from depth trape as soon as possible,because our economy is agriculter base and. Ban Luxary products bane.
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Dr 6 May 05, 2023 07:13pm
@Munawer Aijaz, which luxury products? Cara , electronics and etc already banned
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Tulukan Mairandi May 05, 2023 08:04pm
Default is certainly happening
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bonce richard May 06, 2023 05:14am
@Tulukan Mairandi, Mr. Punjabi Shahbaz Sharif will bring stolen money from the UK and pay all debts.
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Rizwan May 06, 2023 12:09pm
Hi
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Rizwan May 06, 2023 12:10pm
@Nadeem, no
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TimeToMovveOn May 07, 2023 09:05pm
Fitch has now downgraded Pakistan to a CCC rating, denoting an extremely high risk for debt default-we now have $3.7bn worth of debt to pay by June--But Pakistan's priority, KASHMIR, INDIAN MUSLIMS, MODI..
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