After the US declined to entertain Pakistan's request for a $10 billion Liquidity Support Program, Minister for Finance Muhammad Aurangzeb stated that Pakistan has secured $3 billion through the launch of a Eurobond and remains in a "comfortable position" regarding its external accounts. He also confirmed that Islamabad received a $3 billion rollover from the Kingdom of Saudi Arabia (KSA), though he did not disclose the exact timeframe.
"With or without $10 billion from the USA, we are in a comfortable position regarding our external accounts," the minister said while responding to questions after attending a meeting of the Senate Standing Committee on Finance at the Parliament House on Wednesday. Aurangzeb clarified that the request was neither for a credit line nor a guarantee, but specifically for a Liquidity Support Program.
"If this support is provided, it will be fantastic, but if it does not come through, we can comfortably manage our external accounts," he added. The Senate Standing Committee on Finance and Revenue met under the chairmanship of Senator Saleem Mandviwalla.
Federal Secretary Finance Imdad Ullah Bosal briefed the panel, noting that Pakistan's gross external financing repayments stand at $21.5 billion, comprising $17 billion in principal and $4 billion in interest. He highlighted that $7.3 billion exists in bilateral rollovers, including $4 billion in SAFE deposits from China, $3 billion from the KSA, and $300 million from Kuwait.
The KSA has provided $8 billion in deposits, with $5 billion rolled over until 2028 and a potential one-year rollover for the remaining $3 billion for FY27. Bosal stated that excluding the $7.3 billion rollover, remaining external debt repayments stand at $14 billion, of which commercial refinancing accounts for $3.2 billion.
Pakistan may avoid this commercial refinancing due to high costs. The Finance Ministry reported that the government has repaid $5 billion in the first five months, with $6 billion scheduled for the remaining seven months of the current fiscal year.
Minister Aurangzeb also briefed the committee on the Annual Borrowing Plan, projecting public debt at Rs86.7 trillion and gross financing requirements at Rs28.65 trillion. He noted that public debt is expected to decline from 75.1% of GDP in FY2023 to 68.6% by FY2026.
The financial team assured the lawmakers that macroeconomic stability is being maintained despite external challenges. Furthermore, the ministry emphasized that ongoing structural reforms and engagement with international financial institutions will continue to yield positive results.
Independent economists have also reviewed the data and expressed cautious optimism regarding the external account trajectory. The Senate committee appreciated the detailed briefing by the finance ministry officials and stressed the need for strict fiscal discipline.
Concluding the session, Chairman Saleem Mandviwalla urged the government to prioritize export-led growth to permanently resolve the balance of payments issues.