5 days ago

Pakistan’s External Finances Remain Dependent on IMF Loans, Foreign Deposits

Pakistan often needs money from the International Monetary Fund and other countries to pay its bills.

This support has helped prevent several serious financial crises.

However, the country has not increased its exports enough to earn steady foreign income.

In the past, large inflows were used for imports, consumption and real estate.

The China-Pakistan Economic Corridor improved infrastructure and energy supplies, but it did not create enough export growth.

Imports later rose again, increasing pressure on Pakistan’s finances.

Loans and deposits can help for a while, but they may change when politics or financial conditions change.

The report says Pakistan needs stronger exports to achieve lasting economic stability.

Key facts

Main financial supports: International Monetary Fund programmes and deposits from countries including Saudi Arabia and China.
Core vulnerability: Pakistan’s economic expansion has often been driven by imports and consumption rather than exports.
Post-2001 inflows: Aid, debt relief, foreign investment and portfolio flows increased after the September 11 attacks.
2008 crisis: A record current-account deficit contributed to a major economic crisis.
CPEC outcome: The China-Pakistan Economic Corridor helped address energy shortages and improve infrastructure but did not deliver sufficient export growth.
Recent pressures: Pandemic-era stimulus, global commodity-price shocks and political uncertainty increased economic pressure.
Report’s warning: Without meaningful export growth, stabilization efforts could result in prolonged stagnation and another foreign-exchange crisis.

thehansindia.com · 5 days ago