30% of Pakistan’s foreign debt is owed to China, claims IMF Report

Islamabad: The International Monetary Fund (IMF) in its latest report has claimed that 30% of Pakistan’s foreign debt is owed to China, including state-owned commercial banks, compared with 27% in February.

The IMF Report released here maintained that the Chinese debt to Pakistan had been revised upwards by US $4.6 billion to about US $ 30 billion.

This went up from US $25.1 billion in February, according to the IMF Report. The Chinese support is triple the amount of IMF debt and more than the amount given by either the World Bank or the Asian Development Bank.

The debt shows that China is playing a financial role by providing financing during balance of payments crises, rather than World Bank-style concessionary-project financing. Debt for balance of payments support from China has continued with loans to Pakistan being rolled over on a regular basis.

Pakistan secured a bailout from the IMF this week to avert an imminent default, with additional support from friendly nations.

China has rolled over more than US $ 4 billion in loans, while Arab nations including Saudi Arabia have committed US $ 9 billion in investment and loans.

Pakistan’s external debt is low, predominantly held by the public sector and mainly sourced from concessional multilateral and bilateral sources, the central bank said in a presentation it made in July. The country’s foreign loans are 36% of its total debt.