Pakistan has successfully negotiated a one-year deferral on its $12 billion annual debt payments with China, the United Arab Emirates (UAE), and Saudi Arabia, according to Finance Minister Muhammad Aurangzeb.
The deferment agreement is intended to facilitate the approval of a $7 billion economic assistance package from the International Monetary Fund (IMF). Aurangzeb confirmed that the extended repayment timeline will help ensure that the IMF board approves the aid this month.
In July, Pakistan had sought a three- to five-year deferment. In 2023, the country owed $5 billion to Chinese banks, $4 billion to Saudi Arabia, and $3 billion to the UAE. The IMF's conditions for providing the financial aid package include restructuring or deferring these debts and reducing electricity costs.
Pakistan’s total external debt surpassed $125 billion in 2023, with over $20 billion owed to Chinese banks alone. The agreement to extend or restructure these loans is vital for alleviating pressure on Pakistan's balance of payments and reducing energy costs.
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Based on materials from TASS