As of December 15, 2023, Pakistan’s forex reserves stood at $12,068.4 million, less than $136 million of debt the country has to repay. The State Bank of Pakistan currently has $6,904.8 million in deposits. Reserves for commercial banks remained flat at $5,163.6 million.
Along with a major economic crisis, the Pakistani rupee has fallen 40% in value with the US dollar from January 2022 and hit a record low in March 2023. The government exceeded its target of 6.3% as inflation in the first quarter of FY2023– 2023. 2024 at 9.8% in GDP, goods price rose to 26.9% by November 2023. By September 2023, Pakistan’s external debt had risen to $130 billion or 55% of GDP.
Pakistan has applied for IMF bailout from October 2023 in case of default. The IMF calls for fundamental reforms, such as tighter monetary policy, lower subsidies and more tax revenue.
Questions have been raised on the sustainability and transparency of Pakistan’s loans, especially those from China under the China-Pakistan Economic Corridor (CPEC). The $62 billion CPEC project connects Pakistan’s Gwadar port with China’s western zone.
While critics fear rising debt and Pakistan’s dependence on China, the country hopes for economic expansion and job creation. Pakistan has urged the IMF to disclose details of the CPEC deal, ensure repayment and ensure it aligns with the country’s development objectives.
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