Photonews Logo Photonews logo
  • Home
  • Pakistan
    • Punjab
    • Sindh
    • Khyber Pakhtunkhwa
    • Azad Jammu Kashmir
    • Balochistan
    • Gilgit – Baltistan
  • World
  • Business
  • Entertainment
  • Videos
    Gen V Season 2 trailer
    Videos

    Gen V Season 2 Trailer Cast, Plot, Premiere Details

    July 26, 2025 3 Min Read
    IShowSpeed Daniel La Belle race
    Videos

    IShowSpeed Beats Daniel La Belle in 40-Meter Race, Hits 41M Subscribers

    June 24, 2025 2 Min Read
    Cardi B new single Outside
    Videos

    Cardi B’s ‘Outside’ Single Sparks Buzz Over Offset and Stefon Diggs

    June 20, 2025 2 Min Read
  • Sports
  • Technology
  • Offbeat
  • Blog
  • Contact
Reading: Pakistan’s Growing Economic Concerns: Navigating a $4.5 Billion Financing Gap and Underestimated Budget
PhotoNews Pakistan PhotoNews Pakistan
Font ResizerAa
Search
  • Home
  • Pakistan
    • Punjab
    • Sindh
    • Khyber Pakhtunkhwa
    • Balochistan
    • Azad Jammu Kashmir
    • Gilgit – Baltistan
  • World
  • Business
  • Entertainment
  • Videos
  • Sports
  • Technology
  • Offbeat
  • Blog
  • Contact
Have an existing account? Sign In
Follow US
© 2022 Photonews. All Rights Reserved.
Pakistan Economic Challenges
PhotoNews Pakistan > Business > Pakistan’s Growing Economic Concerns: Navigating a $4.5 Billion Financing Gap and Underestimated Budget
Business

Pakistan’s Growing Economic Concerns: Navigating a $4.5 Billion Financing Gap and Underestimated Budget

Web Desk
By Web Desk Published September 20, 2023 3 Min Read
Share
SHARE

Pakistan’s economy is grappling with a notable financing gap of nearly $4.5 billion, coupled with a potential budget overshoot by about Rs 1 trillion due to underestimated debt expenditures. This burgeoning issue is primarily the result of unrealistic projections in the 2023-24 fiscal year’s budget, as per sources from the Ministry of Finance. Numerous discussions have been held recently to find solutions to these challenges. Failure to address these concerns might create complications during the first review of the $3 billion IMF programme scheduled for November this year.

Concerns have escalated as the expected $4.4 billion in foreign loans appear unlikely to be secured, prompting a series of high-level meetings between the Economic Affairs Division and the Finance Division to bridge the financial shortfall. Moreover, there are growing apprehensions that Pakistan may not secure nearly $3 billion in non-Chinese commercial loans due to its low credit rating and the prevailing global high-interest rate environment. Despite these challenges, the finance ministry remains optimistic about securing $1 billion in Chinese commercial financing and about $600 million from various other avenues.

Adjustments and Future Prospects

Given the grim economic outlook, the government is exploring alternative strategies for external financing, such as escalating disbursements from multilateral creditors and funds raised through privatisation. Last month, Interim Finance Minister Dr. Shamshad Akhtar directed a review of the financial plan considering current economic conditions, focusing particularly on projections related to non-Chinese foreign commercial bank loans and sovereign bonds.

Moreover, efforts are underway to negotiate increased disbursements from multilateral and bilateral creditors. Pakistan had earlier forecasted $6.2 billion in inflows from these creditors for this fiscal year but only managed to secure $293 million in July. With the hope that the IMF loan approval would jumpstart further loan disbursements, Pakistan anticipates possible approval of a $350 million loan under the RISE-II initiative from the World Bank in early October.

Concerns Over Underestimated Budget and Debt Servicing

In addition to the financing gap, there is a growing concern over an underestimated budget, particularly regarding debt servicing. Recent assessments indicate that the cost of interest payments might exceed Rs8 trillion, contrary to the initial budget estimate of Rs7.3 trillion. Based on an 18% interest rate assumption instead of a 22% average interest cost, this miscalculation could result in a Rs1 trillion shortfall this fiscal year. Consequently, the anticipated federal budget deficit could escalate to over Rs8.5 trillion, potentially impacting the country’s economic stability in the long run.

These unfolding developments signify a critical juncture for Pakistan’s economy, necessitating swift and effective measures to mitigate potential financial instabilities and secure a robust economic future.

TAGGED:FeaturedIMFPak­istan
Share This Article
Facebook Twitter Pinterest Whatsapp Whatsapp LinkedIn Email Copy Link Print
Leave a comment

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Advertisement

HBL Saving Made Easy
HBL Saving Made Easy

Recent Posts

Russia Ukraine Long-Range Missiles

Russia’s New Law Fines Internet Users for Extremist Content Searches

Bitcoin Pakistan 2025

Bitcoin Hits PKR 32.36M in Pakistan, Signals Financial Shift

BCCI Bronco Test

BCCI Introduces Bronco Test to Boost Indian Cricket Team Fitness

Post Archives

More Popular from Photonews

Mahnoor Cheema A-Level records
Pakistan

Mahnoor Cheema Sets Four World Records with 24 A-Level Distinctions

2 Min Read
Katy Perry electric shock
Entertainment

Katy Perry Suffers Electric Shock Scare at Lifetimes Tour Concert

3 Min Read
Judge Frank Caprio
World

Judge Frank Caprio, Star of Caught in Providence, Dies at 88

2 Min Read
Sports

Mohamed Salah Wins Historic Third PFA Player of the Year Award

Liverpool forward Mohamed Salah was named the Professional Footballers’ Association (PFA) Player of the Year, becoming…

August 20, 2025
Sindh

NDMA Warns of Heavy Rainfall and Flood Risks in Sindh

On August 19, 2025, the National Disaster Management Authority (NDMA) of Pakistan issued an urgent warning…

August 19, 2025
Entertainment

Sydney Sweeney’s Americana Flops at Box Office Amid Controversy

Sydney Sweeney’s latest film, Americana, a crime thriller directed by Tony Tost, opened to a disappointing…

August 18, 2025
Top NewsWorld

India and China Resume Direct Flights and Boost Trade Ties

On August 19, 2025, India and China agreed to resume direct flights and enhance trade and…

August 20, 2025
PhotoNews Pakistan

Always Stay Up to Date

Subscribe to our newsletter to get our newest articles instantly!

Categories

  • World
  • Pakistan
  • Punjab
  • Sindh
  • Khyber Pakhtunkhwa
  • Balochistan
  • Azad Jammu Kashmir

 

  • Top News
  • Business
  • Entertainment
  • Sports
  • Videos
  • Tech
  • Offbeat
  • Blog

© 2024 Phototnews
All Rights Reserved.

Welcome Back!

Sign in to your account

Lost your password?