Pakistan on tenterhooks as Saudi Arabia keeps mum on critical $3 bn loan

Pakistan, which will have to make a repayment of $1 billion by next week to avoid a default, is desperately hoping to get $3 billion from Saudi Arabia amid uncertainty over the International Monetary Fund’s (IMF) loan programme.

However, Pakistan’s Finance Minister Ishaq Dar “twice in the past three months” made this claim. But Pakistan is yet to get the loan from Saudi Arabia.

This, if Pakistan manages to get the loan amount, will be its second financial lifeline in the last one year.

IMF revived the $6 billion loan package under Extended Fund Facility in August.

Dar, who severely criticised the IMF in the past, however has softened his stand saying that his government is committed to the IMF programme. But he has also underlined that he will not take any measure that would increase burden on the common man.

While the IMF had asked Pakistan to eliminate fuel subsidies and increase the tax net by imposition of new taxes, Dar has gone ahead and reduced fuel prices.

Last month, he announced a reduction in petrol and diesel prices by (Pakistani) Rs 10 and Rs 7.5 respectively.

Pakistan will also go to polls this year.

Pakistan, which had begun the process of eliminating untargeted subsidies under its former Finance Minister Miftah Ismail, is once again back on the course doling out money to various sectors.

Also read: Is debt-ridden Pakistan set to kowtow before the IMF as 2023 begins?