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Business News/ News / World/  Pak's economy in 'shambles'; China is lending a hand

Pakistan's external foreign debt amounts to $126 billion, out of which $30 billion is held by China, according to the International Monetary Fund (IMF) data. This amount is three times larger than Pakistan's IMF debt of $7.8 billion and exceeds its borrowings from the World Bank and Asian Development Bank altogether.

According to a report by Reuters on Friday, the Industrial and Commercial Bank of China has approved the rollover of a $1.3 billion loan to Pakistan. This is in addition to the $700 billion that the bank had previously lent to the country.

Meanwhile, for the IMF to assist its members in overcoming their current financial difficulties, the IMF will temporarily raise their funding ceilings.

Under the fund’s General Resources Account, the annual limit will be raised to 200% of the quota for a period of 12 months from the current 145%, the financial agency said in an official statement.

Costs for all goods and services, including necessities, are skyrocketing.

The consumer food index is at 27.5%, which is the highest level in 50 years. Kerosene costs 202.73 per litre, diesel 280, and gasoline 272; these materials are used by the poor for lighting and cooking.

Since April 2022, there has been a 44% devaluation of the Pakistani rupee. Seven times in the past year.

According to a 2019 study by the Jang Group and Geo TV, the United States has given Pakistan $70 billion under a variety of headings since 1947. This includes large sums for terrorist prevention as well as for health and education. Also compensated for its logistical assistance throughout the fight against terror in Afghanistan is the Pakistani Army.

The poll came up with an approximate value of $70 billion till 2019, however, the volume of help fluctuated based on US geopolitical considerations. Pakistan served as the frontline state in the US and NATO war on terror in Afghanistan and received considerable economic and military aid.

The financial body has also asked Pakistan to give an assurance that its balance of payments deficit is fully financed for the fiscal year ending in June to unlock the next tranche of IMF funding.

(With agencies' input)

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Updated: 07 Mar 2023, 05:31 PM IST
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