Wednesday, February 19, 2025

Pakistan’s Debt Dilemma: $5.66 Billion in Interest and $7.50 Billion in Repayments Over 19 Years

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Over the past 19 years, Pakistan has shouldered a significant financial burden related to international bonds, marked by substantial interest payments and principal repayments.

During this period, the country has paid $5.66 billion in interest on Euro and Sukuk bonds and repaid $7.50 billion in principal.

This was revealed in a briefing to the Senate Standing Committee on Economic Affairs by officials from the State Bank and the Ministry of Finance.

Currently, Pakistan owes $6.8 billion, due by June 2024. The latest international bond was issued in January 2022, following a $2.5 billion bond in April 2021, with interest rates between 5.75% and 8.75%.

Officials anticipate a potential reduction in global interest rates, including by the US Federal Reserve, which may affect European, British, and Canadian markets.

While there is a possibility of a decrease in Pakistan’s policy rate, the Ministry of Finance has indicated that no new bonds will be issued until global rates decline further.


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