Pakistan’s economic crisis has further increased following Operation Sindoor, India’s military action over the Pahalgam terror attack. Pakistan is now utterly dependent on foreign loans to fuel its daily requirements, imports, and subsidies apart from colossal monetary losses and brisling inflation.
Pakistan’s overall public debt is worth $256 billion (₹21.6 lakh crore) which represents 67% of its GDP. Each newborn child of the country carries an estimated burden of ₹86,500 in consideration of gravity of its financial conditions.
Pakistan’s Desperate Plea for Assistance
Following the crisis, Pakistan’s Ministry of Economic Affairs traveled abroad to economic friends in quest for emergency loans to finance the financial losses incurred by the war. They later declined the request, however, on the pretext that their X account had been penetrated.
Who Give Financial Assistance to Pakistan?
Pakistan depends on various world financial institutions and friendly states to subsidize its economy:
International Monetary Fund (IMF): Disbursed $7 billion in 2023, and later $1.3 billion in 2024 for climate resilience.
World Bank: Signed a 2024 agreement of $20 billion to finance developmental projects.
Asian Development Bank (ADB): Provided $43.4 billion in loans and grants, with rural infrastructure being $320 million.
China’s Role in Pakistan’s Economy
China is still the largest of these creditors to Pakistan, providing $28.7 billion of infrastructure and development loans through the China-Pakistan Economic Corridor (CPEC). Transparency in this, though, is an issue, as debt due to China by Pakistan is not revealed.
Other Major Lenders
Saudi Arabia, UAE, Qatar, Japan, Germany, France, and the US have all lent money. Saudi Arabia itself has 7% of Pakistan’s foreign debt, and 5.7% is with the IMF.
India’s Position on IMF Bailouts
India has called on the IMF board to exercise caution before it approves Pakistan’s bailout request. Foreign Secretary Vikram Misri stressed that the IMF should take into consideration Pakistan’s financial instability before disbursing additional funds.
The Pakistani economy relies on sustained foreign aid for survival, but its debt crisis erodes sustainability. With lenders rethinking their support, the country is haunted by rising doubts about long-term financial stability.
ALSO READ: Hyderabad Police patrolling amid India Pakistan tension, Here’s Why
Share
Google Pay vs PhonePe vs Paytm: Which UPI App Gives the Most Rewards?
Pakistan missile Fatah-II aimed at Delhi post operation sindoor
