Pakistan has to repay $10.35bn in debt servicing till Dec.

ISLAMABAD: The possibility of external debt default will arise within the first six months (July-Dec), as Pakistan must repay $10.35 billion in foreign debt servicing until the end of December 2023.

In order to avoid a balance of payment crisis, including repayment of external debt and commitments, Pakistan requires emergency infusions of $4 to $6 billion if the IMF programme is not revived by the end of June 2023.

According to information obtained by The News, the country will be required to return $3.79 billion in principal and interest payments in the first quarter (July-September) of the following fiscal year, beginning July 1, 2023.

Islamabad’s external debt servicing requirements will grow to $6.568 billion in the fiscal year 2023-24’s second quarter (October-December).

When contacted, a senior Ministry of Finance official stated that there will be a rollover of deposits totaling $4 billion, including $1 billion from China in July 2023 and the remaining $3 billion from the Kingdom of Saudi Arabia in the second quarter (October-December). It is envisaged that these friendly countries will roll over $4 billion in deposits to Islamabad.

However, there would be a $6 billion debt repayment need that Islamabad would have to meet with depleting foreign exchange reserves.

Details of foreign loan repayments suggest that Pakistan would have to repay $363 million to China under guaranteed debt, including $280 million in principal and $83 million in interest, in the first quarter of the following fiscal year.

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Pakistan owed to repay a total of $1.05 billion in bilateral debt in the first quarter (July-September) of the next fiscal year, with $15 million to France, $24.67 million to Japan, $0.6 million to Korea, $591 million to China, $6.5 million to Kuwait, and $2.29 million to the UAE.

Pakistan will have to repay $398.08 million to Saudi Arabia in the form of foreign loan repayment in the first quarter of the next fiscal year, beginning July 1, 2023.

In an ironic twist, Pakistan would be required to pay $12 million in commitment charges as a penalty to international creditors.

Pakistan will return $72 million as interest on the Eurobond in the first quarter of the following fiscal year. In the first quarter of the following fiscal year, a commercial loan repayment of $84 million will be made in the form of interest payments.

Pakistan will have to repay $660.58 million to multilateral creditors in the first quarter of the next fiscal year, including $298 million to ADB, $9.23 million to AIIB, $9 million to unspent balance, $227.67 million to WB’s IDA loan, $90.5 million to WB’s IBRD, and $22.31 million to IDB.

Pakistan will repay a short-term IDB loan of $107.57 million in the first quarter of the current fiscal year.

Total grand foreign loan repayments were $3.79 billion in the first quarter (July-September) of the next fiscal year, comprising $2.99 billion in principle and $801.6 million in interest payments.

According to official data, Pakistan would have to repay a Chinese commercial bank $33.38 million during the second quarter (October to December) of fiscal year 2023-24.

be bilateral debt repayments to friendly countries will be $1.009 billion.

In the second quarter of the following fiscal year, $33 million in commercial debt will be repaid. The Kingdom of Saudi Arabia (KSA) deposit payback will be $3.03 billion, consisting of $3 billion in deposits as principal and $30 million in interest repayment. The KSA is expected to grant a rollover of $3 billion in deposits.

The IMF will be repaid $228 million in the second quarter of the next fiscal year. The payback for Naya Pakistan Certificates will be $80 million.

In the second quarter of the next fiscal year, total foreign loan repayments to multilateral creditors will be $730.29 million. The IDB short-term loan repayment will be $64.2 million.

Total external debt repayments will be $6.568 billion in the second quarter of the next fiscal year, posing a major risk to the economy, while foreign exchange reserves are now about $4 billion.