China rolls over $2.4 billion loan for two years for Pakistan

EXIM Bank Rolls over 2.4 billion loan payments for Pakistan

About a week ago Prime Minister of Pakistan, Mian Shehbaz Sharif had announced that china have rolled over $600 million loan for Pakistan, so Pakistan do not have to make immediate payments in these testing times. Recently another development came through, as the Exim Bank of China have rolled over the overall payments of $2.4 billion USD.

These were the principal loan amounts which Pakistan had to pay this year, however they have been rolled over for two years by Chinese Exim bank. Pakistan is required to make the interest payments in these upcoming two years.

The current finance minister, Ishaq Dar have recently announced the details of this development in his tweet on social media platform twitter, telling that the loan of 2.4 billion have been rolled over and Pakistan is required to make only the interest payments in following two years.

Exact text of tweet by finance minister, Ishaq Dar is as follows.

Chinese EXIM Bank has rolled over for 2 years principal amounts of following loans totalling US$ 2.4 billion which are due in next 2 fiscal years:

FY2023-24: US$1.2 billion
FY2024-25: US$ 1.2 billion

Pakistan will make interest payments only in both years.

Tweet by Ishaq Dar on 10:02AM, July 27, 2023

If you want to see it yourself, well the tweet by the finance minister Ishaq Dar is embedded below.

The strategy of current PDM led govt is to secure more loans in these testing times and roll over the existing payments to following years. Currently when the country is economically struggling, these steps will bring in some temporary stability and reduce pressure on our foreign currency reserves, however, in long term, it can be catastrophic if some necessary steps not taken.

Talking of necessary steps, Pakistan’s biggest problem is that it is an import based economy. Everything we consume is mostly imported. We need to cut on our imports and bring our exports to at least the level of imports in terms of money.

Govt need to provide some serious tax benefits to industries which can provide or produce the good and services which can be exported. Also IT industry of Pakistan is much behind the India and Bangladesh in terms of exports, govt need to support this industry as well, this industry have potential to single handedly take Pakistan out of hot waters of bad economy.

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