Finance Minister Muhammad Aurangzeb sounded a confident tone, saying that Pakistan will meet its external debt obligations in the coming fiscal year, amid reports that the country’s requirements surpass its current level of foreign exchange reserves.
“On the external finance side, once the International Monetary Fund (IMF) programme is in place, I don’t see that as a big challenge,” said Aurangzeb, remarks that were made as he unveiled the Economic Survey 2023-24 on Tuesday evening.
The State Bank of Pakistan (SBP) in its post Monetary Policy Committee (MPC) briefing said in FY24 the total external debt to be serviced amounted to $24.3 billion with $3.9 billion allocated for interest payments and the remaining $20.4 billion as principal repayments.
The central bank informed that $10.8 billion has been paid till 11MFY24. Moreover, $1 billion additional payment is expected in the remaining months of FY24, and this will take total repayment to ~USD 12bn.
Addressing media persons, Aurangzeb maintained that Pakistan will manage external debt in FY25 similar to its pattern adopted in the outgoing fiscal.
“We will follow almost the same pattern in terms of our repayment schedule,” he said.
“We will see rollovers,” said the former banker. “I do see some of the commercial bank borrowing coming back in.”
Aurangzeb shared that during the last fiscal year “some of the appetite disappeared, especially from the Middle Eastern commercial banks” due to the delay in the IMF programme back then.
“Because of the delayed programme, our ratings went down and therefore, they withdrew their support,” he said.
The finance minister said that on the external finance side, Pakistan is entering the current fiscal year “on a much stronger note, than we were in the last year”.
Aurangzeb remained confident that the debt repayment would not be “a big issue”.
“I do see some of the commercial bank borrowing coming back in,” said the minister.
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