Mon 24 Apr 2023:

Pakistani government hope that Islamabad will sign a deal for additional deposits of $2 billion from the Kingdom of Saudi Arabia (KSA), media reports said.

A top government official said that the State Bank of Pakistan will sign a deal with the Saudi Fund for Development (SFD) soon after Eid for an additional $2 billion deposits, The News reported.

He added that Saudi Arabia had confirmed bilateral assistance support, which was also acknowledged by the SFD staff. This agreement is the follow-up on the confirmation of additional financial support of $2 billion and $1 billion from KSA and the UAE, he added, The News reported.

Official sources clarified that Pakistan neither made any fresh request for more support from the KSA nor the UAE, except for the already confirmed $2 billion and $1 billion by these countries, respectively. Saudi Arabia had already rolled out over $3 billion in deposits for one year, which matured on December 5, 2022.

This $3 billion deposits is part of foreign exchange reserves of $4.43 billion lying with the State Bank of Pakistan.

This $3 billion deposits and $1.2 billion oil facility on deferred payment were provided by the KSA in November 2021 during the tenure of the PTI-led government.

When incumbent Prime Minister Shehbaz Sharif had visited Saudi Arabia after assuming power last year, Pakistani authorities had requested for rollover of $3 billion deposits and a $1.2 billion oil facility for one year, as well as for additional deposits, The News reported.

IMF forecasts

The latest data on Pakistan’s ailing economy was released by the IMF earlier this month, when it unveiled its World Economic Outlook report in Washington, DC.

The IMF also forecast 27 percent inflation for this year for the country of more than 230 million people.

The global lender warned that unemployment would continue to rise in Pakistan which is struggling to avoid a default as it recovers from the destruction caused by last summer’s floods, which killed 1,739 people and caused $30bn in damages.

In recent weeks, the government slashed subsidies and raised taxes to comply with the bailout terms and secure the release of the $1.2bn portion of the deal that has been stalled since December. But those measures resulted in increases in the price of food, gas and power.

Sharif’s government has become unpopular because of higher food costs, although he has blamed Khan, who is now the country’s opposition leader, for mismanaging the economy when he was in power.

Khan was deposed last April in a no-confidence vote in parliament, and since then he has been leading rallies in a failed attempt to force Sharif to agree to an early election, which is scheduled for later this year.

SOURCE: INDEPENDENT PRESS AND NEWS AGENCIES

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