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The International Monetary Fund (IMF) has once again raised a red flag in the context of the China Pakistan Economic Corridor (CPEC), saying that new investment in early 2022 could boost growth prospects, but emerging liabilities pose a risk to debt sustainability, the media said. He reported.
In the year In early 2022, new investments were announced through the China-Pakistan Economic Corridor (CPEC), established in 2013. Although the infrastructure in these secondary investments may boost growth prospects, the series of liabilities pose a threat to debt sustainability. “The IMF stated that it was only done with the Fund’s staff report issued after the approval of Pakistan’s EFF program on public and external debt sustainability analysis.
The report maintains that Pakistan’s public debt continues to be supported by strong policies and robust growth, but with more uncertainty, partly because fiscal relaxation in FY22H2 prevented the reduction of the debt ratio projected during the sixth review.
The debt-to-GDP ratio has now fallen from 77.9 per cent at the end of FY21 to 78.9 per cent at the end of FY22, before falling by about 60 per cent in the context of the EFF, the program is fully underway, The News reported.
About 30 percent of Pakistan’s external debt is owed to China, including state-owned commercial banks, compared with 27 percent in February, according to a report by the International Monetary Fund, Bloomberg reported.
China’s debt to Pakistan improved by $4.6 billion to about $30 billion, according to an IMF report, from $25.1 billion in February. China’s support is three times more than the IMF’s debt and more than the World Bank and Asian Development Bank.
The debt shows that China is playing a similar role to the IMF, providing financial support during payment crises rather than World Bank-style concessional-project financing. China’s aid debt continues to flow to Pakistan.
— No matter
san/pgh
(Only the headline and image for this report may have been reproduced by Business Standard staff; the rest of the content was generated automatically from the syndicated feed.)
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