Pakistan needs external financing of $71.88 billion in the next three years, as per the International Monetary Fund (IMF).
The global lender on Monday identified the high external financing risks facing Pakistan.
It said that in the event of a shortfall or slowdown in external funding, the government will have to rely on expensive domestic borrowing.
It has said that the country faces external financing needs of $71.88 billion in the next three years, while funding of $24.96 billion is required this fiscal year alone, the document said.
Moreover, $22.24 billion will be required in 2025, and $24.67 billion in 2026, the IMF documents available with Samaa TV mentioned.
The documents state that Pakistan's debt burden is unsustainable and external risks are high. Tackling the challenge will require heavy financing from international institutions and various countries, they added.
The government has assured the IMF of its external financing arrangements.
“In case of a shortfall in external financing, the government's dependence on expensive local loans will increase,” says IMF, adding that this will further reduce the credit capacity for the private sector.
It further says that a delay in these flows can lead to problems in the euro, the issuance of Sukuk bonds and foreign exchange reserves. “Pakistan will need loan rollover from friendly countries,” the IMF maintained.
The lender’s report has hinted at increased pressure on exchange rates owing to global inflation, tightening conditions and conflicts.
