New Delhi, April 14: The March Economic Outlook report from Pakistan’s Finance Division highlights significant uncertainty in the oil market. Supply disruptions have increased tensions in the crude oil sector, exacerbated by rising tensions between Iran and the United States.
According to an article published in Karachi’s Business Recorder, these factors have led to volatility in the oil market.
On March 30, the IMF stated that already low foreign exchange reserves and limited market access in the Middle East and South Asia make external economic shocks more perilous. This is particularly concerning as rising import bills for fuel, food, and other essentials increase the trade deficit and put pressure on the currency.
This situation is critical for Pakistan, as its foreign exchange reserves stood at $16.4 billion as of March 19, 2026. While this is significantly higher than the $3 billion recorded on February 3, 2023, over $12 billion of this amount comes from rollover loans from three friendly countries each year. The remaining funds are borrowed from various multilateral and bilateral sources or through Eurobonds and Sukuk, which require repayment upon maturity.
The article also notes that this month, the United Arab Emirates requested the return of a $3.45 billion loan from Pakistan. However, no new demands have been made regarding the $800 million from Etisalat, linked to the privatization of PTCL. Additionally, a payment of $1.4 billion for Eurobonds was made this week.
Access to the foreign commercial market has been challenging for Pakistan over the past three to four years. The economy remains weak, and international rating agencies have not assigned it an investment-grade rating.
Despite improvements in ratings due to participation in the IMF program last year, Pakistan’s rating still falls within a high-risk category, indicating a persistent risk of default. While the country is currently meeting its financial obligations, worsening economic conditions could make repayment difficult.
The ongoing conflict in the Middle East is further impacting Pakistan’s economy and business environment, similar to its effects on other countries worldwide.
My name is Ganpat Singh Choughan. I am an experienced content writer with 7 years of expertise in the field. Currently, I contribute to Daily Kiran, creating engaging and informative content across a variety of categories including technology, health, travel, education, and automobiles. My goal is to deliver accurate, insightful, and captivating information through my words to help readers stay informed and empowered.
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