Pakistan’s dependence on external financial support is deepening, with Saudi Arabia adding another $3 billion to Pakistan’s foreign exchange reserves.

The latest support takes Saudi cash deposits with Pakistan’s central bank to $8 billion, providing Islamabad with additional foreign-exchange liquidity and helping meet external financing pressures.

But the fresh Saudi support does not resolve Pakistan’s underlying financing challenges. Islamabad is also looking toward Washington, with Finance Minister Muhammad Aurangzeb confirming that Pakistan has formally requested a $10 billion exchange stabilization support facility from the United States.

Pakistan says the proposed US facility would not be a conventional loan or credit line, but rather a confidence signal for its currency and foreign-exchange stability. Islamabad hopes stronger external backing could improve investor confidence and eventually help the country return to international capital markets for longer-term borrowing.

Pakistan’s Financial Crisis Deepens: Saudi Adds $3 Billion As Islamabad Seeks $10 Billion From US

Pakistan's ex-Federal Board of Revenue Chairman Shabbar Zaidi blamed China for his country's economic crisis. This comes amid reports that only 38 out of 90 projects envisaged under the China-Pakistan Economic Corridor have been completed so far. China remains Pakistan's biggest creditor.

Ex-Top Pak Official Blames Economic Woes on China: Here's How CPEC Has Been a Failure

Amid a raging debt crisis, Pakistan decided to sell a stake worth $1 billion in Fauji Foundation to the United Arab Emirates, along with a rollover possibility of debt worth $2 billion by the Gulf country. The deal is expected to provide much-needed respite to the cash-strapped country, &nbsp;looking to manage its current account deficit to meet conditions set by the International Monetary Fund (IMF) for a bailout package. Fauji Foundation, the multibillion-dollar conglomerate, one of the biggest in the country, was founded and run by the Pakistan Army.&nbsp;Pakistan Deputy Prime Minister and Foreign Minister Ishaq Dar on Saturday emphasised that if the deal with the UAE to acquire these stakes goes through, it will settle a liability of around $1 billion on March 31.&nbsp;“We are currently engaged with the UAE…regarding the rollover of $1 billion a few weeks ago. They will be acquiring some shares, and our liability will be eliminated. The shares are of the Fauji Foundation Group. After extensive meetings by the committee, it is taking the lead. We hope that this transaction will be completed by 31 March,” Dar said.&nbsp;According to the official data, Pakistan's total external debt stood at $91.8 billion till June 2025, while its total pubic debt adds up to approximately $286.8 billion. The size of Pakistan's economy is estimated at around $410 billion according to the IMF.&nbsp;Islamabad has raised nearly $12 billion via bilateral loans in recent years to keep the country floating. Dar accused previous governments of inaction on IMF programmes, which allowed Pakistan to arrive in such a situation.&nbsp;“I was right to say that Pakistan would not have taken $12 billion from the begging bowl if it had acted on the IMF programme. We would not have been able to balance our accounts, and the IMF was not willing to come on board. I am grateful that the UAE is also involved. I recognise their co-operation. Saudi Arabia provided $5 billion in support during this period. China supported $4 billion via a state-to-state deposit, and the UAE supported $3 billion,” said Dar. These announcements concerning the stake sale and a potential rollover of the $2 billion loan came after a meeting in Islamabad between Pakistan Prime Minister Shehbaz Sharif and President Sheikh Mohammed bin Zayed Al Nahyan, who was on his second visit to the South Asian country in 2025. Pakistan is currently receiving IMF support under two programmes, a $7 billion Extended Fund Facility (EFF) and a Resilience and Sustainability Facility (RSF) worth about $1.3 billion, underscoring its continued reliance on international financial assistance.&nbsp;This support is part of a long-standing pattern. Since 1958, Pakistan has entered into 23 IMF programmes, repeatedly turning to the global lender to stabilise its economy. Despite successive bailouts, the South Asian nation has remained trapped in a cycle of balance-of-payments crises and recurring fiscal stress, prompting repeated IMF interventions over the decades.&nbsp;

Pakistan’s total external debt stood at $91.8 billion as of June 2025, while the International Monetary Fund estimates the size of the country’s economy at around $410 billion.

Amid a raging debt crisis, Pakistan decided to sell a stake worth $1 billion in Fauji Foundation to the United Arab Emirates, along with a rollover possibility of debt worth $2 billion by the Gulf country. The deal is expected to provide much-needed respite to the cash-strapped country, looking to manage its current account deficit to meet conditions set by the International Monetary Fund (IMF) for a bailout package. Fauji Foundation, the multibillion-dollar conglomerate, one of the biggest in the country, was founded and run by the Pakistan Army. Pakistan Deputy Prime Minister and Foreign Minister Ishaq Dar on Saturday emphasised that if the deal with the UAE to acquire these stakes goes through, it will settle a liability of around $1 billion on March 31. “We are currently engaged with the UAE…regarding the rollover of $1 billion a few weeks ago. They will be acquiring some shares, and our liability will be eliminated. The shares are of the Fauji Foundation Group. After extensive meetings by the committee, it is taking the lead. We hope that this transaction will be completed by 31 March,” Dar said. According to the official data, Pakistan's total external debt stood at $91.8 billion till June 2025, while its total pubic debt adds up to approximately $286.8 billion. The size of Pakistan's economy is estimated at around $410 billion according to the IMF. Islamabad has raised nearly $12 billion via bilateral loans in recent years to keep the country floating. Dar accused previous governments of inaction on IMF programmes, which allowed Pakistan to arrive in such a situation. “I was right to say that Pakistan would not have taken $12 billion from the begging bowl if it had acted on the IMF programme. We would not have been able to balance our accounts, and the IMF was not willing to come on board. I am grateful that the UAE is also involved. I recognise their co-operation. Saudi Arabia provided $5 billion in support during this period. China supported $4 billion via a state-to-state deposit, and the UAE supported $3 billion,” said Dar. These announcements concerning the stake sale and a potential rollover of the $2 billion loan came after a meeting in Islamabad between Pakistan Prime Minister Shehbaz Sharif and President Sheikh Mohammed bin Zayed Al Nahyan, who was on his second visit to the South Asian country in 2025. Pakistan is currently receiving IMF support under two programmes, a $7 billion Extended Fund Facility (EFF) and a Resilience and Sustainability Facility (RSF) worth about $1.3 billion, underscoring its continued reliance on international financial assistance. This support is part of a long-standing pattern. Since 1958, Pakistan has entered into 23 IMF programmes, repeatedly turning to the global lender to stabilise its economy. Despite successive bailouts, the South Asian nation has remained trapped in a cycle of balance-of-payments crises and recurring fiscal stress, prompting repeated IMF interventions over the decades.

Pakistan’s total external debt stood at $91.8 billion as of June 2025, while the International Monetary Fund estimates the size of the country’s economy at around $410 billion.

Amid spiralling debt crisis, Pakistan to sell $1bn Fauji Foundation stake to UAE

Pakistan is focusing to finalise both the delayed privatisation of its flag carrier and the outsourcing of Islamabad's international airport in November, the country's finance minister said on October 23, according to a detailed report by Agence France-Presse (AFP).

Muhammad Aurangzeb, who took office earlier this year, spoke to AFP at the World Bank's headquarters in Washington, where he is attending the annual meetings of the International Monetary Fund and the World Bank. During an earlier interview with AFP in April 2024, Aurangzeb had stated that he hoped the privatisation of the government-owned Pakistan International Airlines (PIA) could be completed by June 2024. Still, the process got delayed.

Speaking On October 23, the finance minister stated that the five-month delay was due to two factors: ensuring macroeconomic stability, and doing the proper due diligence of the interested parties. "The reality is, when any foreign investor comes in, or even the local investor, who are going to put in a substantial amount of money, they want to ensure that the foundation is there," he said, referring to macroeconomic factors.

Aurangzeb further noted that potential bidders for both PIA and Islamabad airport also required scrutiny, is another factor in the delay. "Therefore it's ultimately the cabinet which approved the extension in the timelines so people can do their due diligence before they make these submissions," he mentioned.

Pakistan was nearly on the brink of default<o:p></o:p>

Aurangzeb said Pakistan had been behind on existing profit and dividend repayments when the current government took office, and had taken steps to remedy that after making progress on macroeconomic stability.

The country was nearly on the brink of default last year as the economy shrank amid political chaos following catastrophic 2022 monsoon floods and decades of mismanagement, along with a global economic downturn.

Inflation in the country peaked at 38 per cent but has since dropped to less than 7 per cent, after the central bank maintained sky-high interest rates, amid other government tightening measures, including import bans to preserve foreign exchange.

Past month, the IMF approved a $7 billion loan, Pakistan's 24th such payout from the multilateral lender since 1958. Aurangzeb touted progress on the country's current account deficit and the stabilisation of the Pakistani rupee, which has depreciated against the US dollar by about 65 per cent since 2020.

"In May and June on the back of this macroeconomic stability and building up on our reserves, we paid more than $2 billion to our existing international investors," he explained. Pakistan's gross public debt currently stands at 69 per cent of GDP, according to the IMF, or roughly $258 billion.

Tax collection has hit a saturation point <o:p></o:p>

Alongside privatizing state-owned enterprises (SOEs), Pakistan's IMF deal also rests on increasing its tax base and reforming the country's power sector. Aurangzeb told AFP there was a common theme between all three major issues.

"Tax, power, SOE: There's leakage, there's theft, there's corruption, right?" he said. "And we have to deal with all of that."

But he dismissed media reports that the government was not serious about broadening its tax base, saying that the tax take had risen by 29 per cent in the last fiscal year, which overlapped with a prior caretaker government and was targeted to rise by a further 40 per cent in the current fiscal year.

In a nation of more than 240 million people where most jobs are in the informal sector, only 5.2 million filed income tax returns in 2022.

"People who are not paying up, they need to start paying for the simple reason that we have reached a saturation point of the people who are paying," he said.

"The salaried class, the manufacturing industry, reached a saturation point. And this cannot go forward," he added. The government was also committed to doing a better job of taxing certain sectors of the economy, he said, naming real estate, retail, retail distributors, and agriculture.

These changes are expected to bring positive results for the economy of the nation and help it in bringing its debt down.

<o:p>&nbsp;</o:p>

<o:p>&nbsp;</o:p>

Pakistan is focusing to finalise both the delayed privatisation of its flag carrier and the outsourcing of Islamabad's international airport in November, the country's finance minister said on October 23, according to a detailed report by Agence France-Presse (AFP).

Pakistan is focusing to finalise both the delayed privatisation of its flag carrier and the outsourcing of Islamabad's international airport in November, the country's finance minister said on October 23, according to a detailed report by Agence France-Presse (AFP). Muhammad Aurangzeb, who took office earlier this year, spoke to AFP at the World Bank's headquarters in Washington, where he is attending the annual meetings of the International Monetary Fund and the World Bank. During an earlier interview with AFP in April 2024, Aurangzeb had stated that he hoped the privatisation of the government-owned Pakistan International Airlines (PIA) could be completed by June 2024. Still, the process got delayed. Speaking On October 23, the finance minister stated that the five-month delay was due to two factors: ensuring macroeconomic stability, and doing the proper due diligence of the interested parties. "The reality is, when any foreign investor comes in, or even the local investor, who are going to put in a substantial amount of money, they want to ensure that the foundation is there," he said, referring to macroeconomic factors. Aurangzeb further noted that potential bidders for both PIA and Islamabad airport also required scrutiny, is another factor in the delay. "Therefore it's ultimately the cabinet which approved the extension in the timelines so people can do their due diligence before they make these submissions," he mentioned. Pakistan was nearly on the brink of default Aurangzeb said Pakistan had been behind on existing profit and dividend repayments when the current government took office, and had taken steps to remedy that after making progress on macroeconomic stability. The country was nearly on the brink of default last year as the economy shrank amid political chaos following catastrophic 2022 monsoon floods and decades of mismanagement, along with a global economic downturn. Inflation in the country peaked at 38 per cent but has since dropped to less than 7 per cent, after the central bank maintained sky-high interest rates, amid other government tightening measures, including import bans to preserve foreign exchange. Past month, the IMF approved a $7 billion loan, Pakistan's 24th such payout from the multilateral lender since 1958. Aurangzeb touted progress on the country's current account deficit and the stabilisation of the Pakistani rupee, which has depreciated against the US dollar by about 65 per cent since 2020. "In May and June on the back of this macroeconomic stability and building up on our reserves, we paid more than $2 billion to our existing international investors," he explained. Pakistan's gross public debt currently stands at 69 per cent of GDP, according to the IMF, or roughly $258 billion. Tax collection has hit a saturation point Alongside privatizing state-owned enterprises (SOEs), Pakistan's IMF deal also rests on increasing its tax base and reforming the country's power sector. Aurangzeb told AFP there was a common theme between all three major issues. "Tax, power, SOE: There's leakage, there's theft, there's corruption, right?" he said. "And we have to deal with all of that." But he dismissed media reports that the government was not serious about broadening its tax base, saying that the tax take had risen by 29 per cent in the last fiscal year, which overlapped with a prior caretaker government and was targeted to rise by a further 40 per cent in the current fiscal year. In a nation of more than 240 million people where most jobs are in the informal sector, only 5.2 million filed income tax returns in 2022. "People who are not paying up, they need to start paying for the simple reason that we have reached a saturation point of the people who are paying," he said. "The salaried class, the manufacturing industry, reached a saturation point. And this cannot go forward," he added. The government was also committed to doing a better job of taxing certain sectors of the economy, he said, naming real estate, retail, retail distributors, and agriculture. These changes are expected to bring positive results for the economy of the nation and help it in bringing its debt down.

Pakistan aims to privatize flag carrier in November: Finance Minister

As Pakistan continues to struggle economically, a report by the prominent Washington-based think tank, United States Institute of Peace (USIP), said that the cash-strapped country needs to repay a whopping $77.5 billion in external debt from April 2023 to June 2026. The report published on Thursday (April 6) also warned that Islamabad could face “disruptive effects” if it ultimately defaults.&nbsp;

Pakistan is currently facing soaring inflation at 35.37 per cent which is the highest in over five decades while prices of essential food items such as wheat flour, sugar, and edible oil rose significantly. Meanwhile, the country is also facing political conflicts and rising terrorism, said the report, warning that it is at risk of default due to its massive external debt obligations.&nbsp;

According to the USIP report, in the next three years, the debt-stricken country has to repay a number of Chinese financial institutions, private creditors and Saudi Arabia. Between April to June, this year, Islamabad faces near-term debt repayment pressure as the external debt servicing burden is at $4.5 billion, said the report. It added that Pakistan has to repay $1 billion to the Chinese SAFE deposit and another loan of around $1.4 billion from Chinese commercial is also due to mature.&nbsp;

The US-based think tank, in its report, also suggests that Pakistani officials are hoping to convince the Chinese to not only refinance but also roll over both debts, adding that they have managed to do so before. However, even if they do pull it off this time as well, the next fiscal year for Pakistan would be more challenging as the debt servicing will reportedly rise to nearly $25 billion.

The short-term debt repayments include $4 billion to Chinese SAFE deposits, $3 billion to Saudi deposits and $2 billion to United Arab Emirates (UAE) deposits, said the report, adding that the “Pakistani government assumes they will be rolled over by the creditors each year.” Separately, Pakistan also needs to repay another $1.1 billion of long-term commercial loans to Chinese banks, said the USIP.&nbsp;

As of December 2022, Islamabad also holds external debt and liabilities of $126.3 billion, at least 77 per cent of this debt, which amounts to around $97.5 billion, is directly owed by the government of Pakistan to various creditors.&nbsp;

Meanwhile, Pakistan also continues to struggle with securing the $6.5 billion bailout package the International Monetary Fund (IMF) approved in 2019 which also expires in June this year. However, Pakistan and the IMF have been negotiating the programme's resumption for months but are yet to reach an agreement.

(With inputs from agencies)&nbsp; 
 
&nbsp;

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As Pakistan continues to struggle economically, a report by the prominent Washington-based think tank, United States Institute of Peace (USIP), said that the cash-strapped country needs to repay a whopping $77.

As Pakistan continues to struggle economically, a report by the prominent Washington-based think tank, United States Institute of Peace (USIP), said that the cash-strapped country needs to repay a whopping $77.5 billion in external debt from April 2023 to June 2026. The report published on Thursday (April 6) also warned that Islamabad could face “disruptive effects” if it ultimately defaults. Pakistan is currently facing soaring inflation at 35.37 per cent which is the highest in over five decades while prices of essential food items such as wheat flour, sugar, and edible oil rose significantly. Meanwhile, the country is also facing political conflicts and rising terrorism, said the report, warning that it is at risk of default due to its massive external debt obligations. According to the USIP report, in the next three years, the debt-stricken country has to repay a number of Chinese financial institutions, private creditors and Saudi Arabia. Between April to June, this year, Islamabad faces near-term debt repayment pressure as the external debt servicing burden is at $4.5 billion, said the report. It added that Pakistan has to repay $1 billion to the Chinese SAFE deposit and another loan of around $1.4 billion from Chinese commercial is also due to mature. The US-based think tank, in its report, also suggests that Pakistani officials are hoping to convince the Chinese to not only refinance but also roll over both debts, adding that they have managed to do so before. However, even if they do pull it off this time as well, the next fiscal year for Pakistan would be more challenging as the debt servicing will reportedly rise to nearly $25 billion. The short-term debt repayments include $4 billion to Chinese SAFE deposits, $3 billion to Saudi deposits and $2 billion to United Arab Emirates (UAE) deposits, said the report, adding that the “Pakistani government assumes they will be rolled over by the creditors each year.” Separately, Pakistan also needs to repay another $1.1 billion of long-term commercial loans to Chinese banks, said the USIP. As of December 2022, Islamabad also holds external debt and liabilities of $126.3 billion, at least 77 per cent of this debt, which amounts to around $97.5 billion, is directly owed by the government of Pakistan to various creditors. Meanwhile, Pakistan also continues to struggle with securing the $6.5 billion bailout package the International Monetary Fund (IMF) approved in 2019 which also expires in June this year. However, Pakistan and the IMF have been negotiating the programme's resumption for months but are yet to reach an agreement. (With inputs from agencies) WATCH WION LIVE HERE You can now write for wionews.com and be a part of the community. Share your stories and opinions with us here.

Cash-strapped Pakistan owes $77bn to China, Saudi Arabia, needs to repay by 2026: Report

UAE has agreed to roll over $2 billion owed by Pakistan and provide the country with an extra loan of $1 billion, Islamabad said Thursday.

UAE agrees to roll over Pakistan debt, give additional $1 billion

According to the reports, Pakistan's weekly inflation witnesses 30 percent rise compared to last year amid a rise in the prices of food and a couple of fuel items. Now, the question is will 2023 bring some relief for Pakistan?

Is Pakistan's economic crisis getting worse?