China 'agrees' on $2b debt rollover to Pakistan

ISLAMABAD: In a significant development, China has “agreed” on a rollover of $2 billion debt to Pakistan, ARY News reported citing sources.

According to sources with the finance ministry, the $2 billion debt will be rolled over before the maturity date on the existing conditions.

Sources said that less than 2 percent interest will be applied on the deposit of $2 billion debt from China.

The maturity time of $2 billion debt will end on March 23, 2024, and a further $2 billion will be rolled over for one year, sources added.

In July 2023, China deferred the $2 billion debt payment to Pakistan for two years. The China Eximbank officially wrote to Pakistan about the delay in the recovery of debt.

Pakistan was also exempted from paying additional interest on the loan and will repay the debt amount as per the agreement with China. All 31 loan agreements were extended from the earlier deadline of July 21, 2023, to June 30, 2025, sources added.

It is pertinent to mention here that Pakistan’s total debt burden reached a whopping Rs 63,399 trillion, at the end of November in FY2023-24.

The country’s total debt increased by over Rs12.430 trillion during the tenure of the PDM and the caretaker government.

Pakistan’s overall debt burden surged to Rs63.390 trillion including Rs40.956 trillion domestic loan and Rs22.434 trillion in international loans.