UAE rolls over $2 billion payment for Pakistan, says PM Sharif

UAE Extends $2 Billion Loan to Pakistan, Strengthening Economic Ties

ISLAMABAD, Jan. 7: Prime Minister Shehbaz Sharif on Tuesday said the United Arab Emirates (UAE) has agreed to waive off $2 billion due to Pakistan this month.

Addressing a cabinet meeting, the prime minister said that United Arab Emirates (UAE) President Mohamed bin Zayed had conveyed the decision to him during a meeting in Rahim Yar Khan over the weekend.

The UAE president was on a private visit to Rahim Yar Khan in Punjab province but met Sharif at the event.

“He happily informed me that the UAE is extending the $2 billion due to Pakistan in January. He proposed it himself and immediately [gave his] consent,” Sharif said.

According to a research, Pakistan’s external public debt is at the same level as it was two years ago, at $100 billion, but its foreign exchange reserves have grown from $2.7 billion to $11.7 billion.

A loan rollover of this kind typically lasts for a year, although the prime minister did not specify when the extension would take place. In order to assist Pakistan in resolving its balance of payments issues, the United Arab Emirates and Saudi Arabia have both started making bilateral payments.

The prime minister also informed the cabinet that the president of the United Arab Emirates pledged to invest in Pakistan during their meeting, which was centered on fostering investment and enhancing bilateral ties.

When the deposit matured on December 5, the Saudi central bank announced that it had extended the payback time of a $3 billion loan to Pakistan by an additional year since the cash-strapped nation was unable to repay the debt.

Saudi Arabia retained a $3 billion deposit for a year in 2021 before rolling it over in 2022 and 2023, according to the State Bank of Pakistan.

According to officials at the time, Pakistan would require a loan extension until the end of June 2025 in order to avoid repaying at least $13 billion that it owed to China, Saudi Arabia, and the United Arab Emirates.

Meanwhile, on Tuesday, the prime minister expressed satisfaction over the stability in the economy and stressed that with continued perseverance and hard work, the country would be put on the path of progress.

However, he pointed out that lower electricity rates were essential for the growth of agriculture and industry.

According to its agreement with the International Monetary Fund (IMF) to obtain a $7 billion loan package in September 2024, Pakistan is having difficulty increasing revenue collection.

For the fiscal year 2024–25, Pakistan has set a target of Rs12.913 trillion, which represents a 40% increase over the amount of taxes received in the previous fiscal year. Compared to Rs2,652 billion in the first quarter of current year (July-September), the FBR has collected Rs2,556 billion.

The rise in textile exports was deemed positive by Prime Minister Sharif. “We must prioritize export-led growth and work to boost exports from non-traditional sources,” he stated.

Sharif also said in his cabinet address that the Indonesian President is expected to visit Pakistan this month. He stressed that Pakistan has brotherly relations with Indonesia and an agenda is being prepared for discussions with visiting dignitaries.

He said that Pakistan can export halal meat and rice to Indonesia. (PTI)