Pakistan to repay $1 billion loan on Eurobond maturity

ISLAMABAD: Pakistan will have to repay $01 billion loan on maturity of five year Eurobond on April 19, 2019, in next fiscal year (2018-19) which the PML-N government had obtained in April 2014 during the tenure of former finance minister Ishaq Dar.

“Pakistan will have to pay back $5 billion in shape of amortisation of outstanding foreign loans in the next fiscal year,” it has been estimated by Ministry of Finance through budget 2018-19 and shared with The News here on Thursday.

Pakistan’s total gross financing requirements on external from is projected at $19 billion for next fiscal year provided Islamabad takes corrective measures by allowing hike in discount rates and slight adjustments in exchange rate to boost exports and suppress imports.

“Total gross financing requirements has been estimated at $19 billion for next fiscal year on account of projected current account deficit close to $14 billion and amortisation of loans of $5 billion, including repayments of interest and principle amounts of outstanding loans.

The annual plan 2017-18 had envisaged current account deficit of $09 billion (2.6 percent of the GDP) while deficit of $12.6 billion (4.1 percent of the GDP) is actually recorded during 2016-17. With estimated trade deficit of $29.4 billion and remittances of $20 billion by the end of 2017-18, the current account is likely to be in deficit by $15.4 billion (4.9 percent of the GDP); However, in first nine months of the current fiscal year, the current account deficit has already crossed $2 billion mark.

Based on positive global outlook, the Planning Commission has done forecasting of the Current Account Deficit on the basis of improved domestic infrastructure, energy supply and business environment, exports in 2018-19 are projected to reach $ 28 billion from $24.9 billion estimated for 2017-18.

On account of higher growth trajectory and planned economic activities under CPEC, imports are expected to increase by 4.8 per cent and reach the level of $56.9 billion in 2018-19 from an estimated total of $54.3 billion for 2017-18, implying trade deficit of $29 billion in 2018-19.

Current Account Balance: Given higher level of imports, resurgence of exports and only modest growth in remittances, current account deficit is projected to be contained at $13.3 billion (4 percent of the GDP) during 2018-19 as against estimated deficit of $15.4 billion (4.9 per cent of the GDP) by the end of ongoing fiscal year.

Capital and Financial Account: Capital inflows are projected to increase from estimated $519 million in 2017-18 to $720 million in 2018-19. General government disbursements during 2018-19 are expected to remain at the level of $9.4 billion against $09 billion estimated for 2017-18 whereas amortisation is projected at $6.6 billion for 2018-19.

Overall Balance: Given projections for current, capital and financial account balances, overall balance is anticipated to result in $1.5 billion addition to reserves by the end of 2018-19, they added.