Pakistan working on possible restructure of debt with bilateral lenders, finance minister says

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Pakistan is working on the possibility of restructuring its bilateral debt regardless of whether it successfully completes its IMF review, the country's finance minister said on Saturday, but reiterated it would not approach Paris club nation creditors or seek haircuts.

"We'll see how things go," Ishaq Dar told reporters, a day after releasing the budget for the 2023-24 financial year, referring to whether to restructure or reprofile debt as Pakistan continues to speak with the IMF about its stalled bailout funds.Pakistan's IMF programme runs out this month with about $2.5 billion in funds yet to be released as it struggles to strike an agreement with the lender.

Dar told a news conference on Saturday that a projection in the government's budget for 3.5% economic growth for the year ending in June 2024 was a "realistic target" and "on the lower side". In the year ending this month, Pakistan's gross domestic product was projected to grow just 0.29%. The fiscal deficit for the following fiscal year was projected at 6.54% of GDP, according to the budget.

In addition to requirements related to the currency and budget, Pakistan is required to secure firm and credible financing commitments to close the $6 billion gap in its foreign reserves in order to unlock funding under its long-delayed ninth IMF review.

 

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