Running on rollovers: Pakistan's reserves get $27 billion foreign loans from Saudi, China
Pakistan's economy remains heavily reliant on foreign loans, receiving $27 billion in inflows last fiscal year, largely through rollovers from Saudi Arabia and China. The majority of these funds are being used for debt repayment and budget financing rather than development projects.
Why it matters
Pakistan's dependence on external debt and its reliance on strategic allies for financial stability highlight the country's ongoing economic fragility and geopolitical positioning.
Pakistan continued to lean towards foreign funding in the last fiscal year, with total inflows touching around $27 billion. Saudi Arabia and China continued to roll over billions of dollars in loans, according to a provisional report by the ministry of economic affairs. In the previous fiscal year, the country had borrowed approximately $26 billion, as it continued to rely on external borrowing to support its economy.The report showed that around $16 billion came through fresh borrowing, while the rest included rollovers, grants, commercial financing and investment instruments. It further stated that Pakistan secured $9 billion in rollovers from its two closest allies during the year.
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