China has rolled over a $2 billion loan to Pakistan, assisting the country in its efforts to stabilize finances post a $7 billion IMF bailout. A review is underway for the disbursement of the initial tranche, potentially unlocking an additional $1 billion in aid. Pakistan must repay over $22 billion in external debt in fiscal year 2025.

In a recent development, China has agreed to roll over a $2 billion loan to Pakistan, as confirmed by Khurram Schehzad, an adviser to Pakistan’s finance minister, in a text message to Reuters. This financial support comes as Pakistan aims to bolster its fiscal situation after securing a substantial $7 billion bailout from the International Monetary Fund (IMF) in September 2024.

The initial tranche of this loan is presently undergoing review, and should this process be favorable, Pakistan could obtain an additional $1 billion. Historically, acquiring external financing has been a critical requirement for the IMF to approve bail-out arrangements for Pakistan, which has faced significant financial challenges.

For the fiscal year 2025, Pakistan is obligated to repay over $22 billion in external debt, which includes close to $13 billion in bilateral deposits, according to Fitch Ratings. The ongoing financial negotiations underscore the pressing need for Pakistan to stabilize its economy amidst growing debt obligations.

In conclusion, China’s rollover of a $2 billion loan signifies an important financial lifeline for Pakistan as the country strives to enhance its economic stability following an IMF bailout. With substantial external debt repayments on the horizon, securing further financial support remains critical for Pakistan’s economic recovery.

Original Source: www.ndtv.com

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