According to the latest International Monetary Fund (IMF) report, Pakistan owes more debt to China than it does to the IMF or the World Bank.
30% of the country’s total debt — its biggest share— is owed to China, which is up 3% from February, when it was 27%, as per a report by Bloomberg, which cited the IMF report. While Pakistan owed China $25.1 billion in February, the debt has increased by $4.6 billion, with Pakistan owing China $30 billion as of September.
The report also said that China’s assistance to Pakistan is three times that of the IMF, and is greater than the loans provided by the IMF and the World Bank combined.
China’s style of lending is unlike the World Bank’s concessionary-project financing; instead, China now acts similarly to the IMF and loans funds during a balance of payment crisis.
Pakistan’s foreign loans make up 36% of its total debt. “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,” Bloomberg said.
Just last week, the IMF revived Pakistan’s Extended Fund Facility (EFF) programme, according to which Pakistan was set to receive $6bn over a 39-month period. The IMF signed an extension for the program on August 29, which will see it continue until June 2023.
On Thursday the money lending watchdog transferred the $1.16 billion loan to the State Bank of Pakistan.