Pakistan may require a record $24 billion of foreign assistance to ride out an economic collapse

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<strong>The Shehbaz Sharif government has missed registering a part of the total quantum foreign debt in the just presented budget "by mistake." This amounts to $7 billion comprising part of Chinese loans as well as assistance from the International Monetary Fund (IMF).</strong></p>
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According to <a href="https://tribune.com.pk/story/2361158/govt-requests-2b-loan-rollover" rel="nofollow">the Express Tribune</a>, Pakistan’s Finance Minister Miftah Ismail has admitted that the exclusion of IMF and some Chinese loans was a mistake that would be rectified.</p>
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With this amount, Pakistan’s foreign economic assistance plan for fiscal year 2022-23 will jump to a record $24 billion, the newspaper said.</p>
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Meanwhile, the IMF has asked Pakistan to take additional measures to “strengthen” its budget further. Pakistan is in talks with the IMF for a bailout package.</p>
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<strong>Also read: <a href="https://www.indianarrative.com/economy-news/pakistan-s-new-headache-slowing-remittance-flow-177200.html">Pakistan's new headache –slowing remittance flow</a></strong></p>
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Pakistan has already increased fuel prices as prescribed by the IMF which has now also asked Islamabad to renegotiate energy deals under the China Pakistan Economic Corridor (CPEC).</p>
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Pakistan has also been talking to its allies including China, UAE and Saudi Arabia for financial assistance. However, the bilateral lenders have adopted a wait and watch policy. They are unwilling to disburse any loan until Islamabad receives the IMF bailout package.</p>
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Amid high inflation and uncertain economic landscape, in June, ratings agency Moody’s downgraded Pakistan’s outlook from “stable” to “negative” indicating that the country’s current account deficit – the difference between the inflow of foreign currency and outflow– will continue to be under pressure in 2022-23 amid high import bills on commodities. Islamabad’s trade deficit also rose by a whopping 58 per cent during July-May period.</p>