Pakistan misses Growth Target, Plans $4.9 billion in loans
Pakistan's economic growth fell short of its target, achieving only 2.68% against a projected 3.6% for the fiscal year 2024-25. In response, the government plans to secure $4.9 billion in loans, including $2.64 billion in short-term loans and $2.27 billion in long-term borrowing from major international banks.
Islamabad [Pakistan], May 21 (ANI): The Pakistani federal government has reportedly fallen short of its economic growth target for the fiscal year 2024-25, achieving a growth rate of just 2.68 per cent against a projected 3.6 per cent, as reported by ARY News on Tuesday, citing sources from Pakistan's National Accounts Committee.
According to ARY News, the report was revealed during a meeting of the National Accounts Committee, chaired by Pakistan's Secretary of Planning.
The meeting revealed that the country's economic output reached USD 411 billion, with per capita income increasing to USD 1,824. Sector-wise performance varied, with agriculture growing by 1.8 per cent during the first three quarters, while the industrial sector declined by 1.14 per cent.
Notably, the services sector posted a strong growth of 39 per cent between July and March, as per ARY News. In parallel, Pakistan is preparing to raise USD 4.9 billion in external commercial financing for the next fiscal year (FY2025- 26), according to sources familiar with the matter.
As part of its financing plan, the government intends to secure USD 2.64 billion in short-term loans from commercial banks at expected interest rates of 7-8 per cent, without strict conditions or performance benchmarks, as per ARY News.
An additional USD 2.27 billion is also expected to come through long-term borrowing arrangements from commercial banks. Efforts are underway to tap four major international banks.
This includes a proposal to obtain USD 1.1 billion from the Industrial and Commercial Bank of China (ICBC), along with USD 500 million each from Standard Chartered Bank and Dubai Islamic Bank. A commercial guarantee is also being sought for a USD 500 million loan from the Asian Development Bank (ADB), ARY News reported.
Meanwhile, the International Monetary Fund (IMF) has set a target for Pakistan to boost its foreign exchange reserves to USD 13.9 billion by the end of June. The State Bank of Pakistan currently holds net reserves of approximately USD 14 billion, reportedly enough to cover three months of imports. (ANI)