Pakistan eyes $4 billion from Middle East banks to plug financing gap

Jameel Ahmad, the Governor of the State Bank of Pakistan, revealed that the country aims to secure up to $4 billion from Middle Eastern commercial banks by the next fiscal year to address its external financing gap. This marks Ahmad's first media engagement since his appointment in 2022. He shared that Pakistan is in the "advanced stages" of obtaining an additional $2 billion in external financing necessary for the International Monetary Fund (IMF) to approve a $7 billion bailout program. The agreement reached in July with the IMF awaits approval from its executive board and confirmation of crucial financing assurances from Pakistan's development and bilateral partners. Ahmad expressed confidence that the country's gross financing needs would be adequately met over the next fiscal year and in the medium term. Historically, Pakistan has depended on allies like China, Saudi Arabia, and the UAE to 'roll over' debt, avoiding a repayment crisis. He anticipates similar support for the next three years, allowing the government time to stabilize its finances. Moreover, Ahmad indicated that the central bank believes Pakistan's gross financing needs for upcoming years will be lower than the IMF's latest projection of 5.5% of gross domestic product. "Pakistan’s external gross financing needs have been declining in recent years," he noted.

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