Bilal Ahmed 
Stabilize a Faltering Economy
In spite of disastrous floods, Pakistan would “absolutely not” default on its financial commitments, the country’s finance minister said on Sunday, signaling that there will be no big diversion from measures aimed to stabilize a faltering economy.
Floods have impacted 33 million Pakistanis, caused billions of dollars in damage, and killed more than 1,500 individuals, causing fear that Pakistan may be unable to pay its obligations.
After months of delay, Pakistan was able to get an International Monetary Fund (IMF) plan back on track owing to harsh policy decisions. However, the optimism was short-lived prior to the disastrous rains.
Decreasing Foreign Exchange Reserves
Ismail stated that, despite the calamity, the majority of stabilization measures and objectives were still on track, including the replenishment of decreasing foreign exchange reserves.
Despite the infusion of $1.12 billion in IMF funds at the end of August, central bank reserves stood at $8.6 billion, which is only sufficient for approximately a month of imports. The goal for the end of the year was to expand the buffer to 2.2 months.
Negative Impact on Exports
Even if the floods cause $4 billion in additional imports, such as cotton, and a negative impact on exports, Pakistan will still be able to enhance its reserves by up to $4 billion, according to the official.
Following the floods, he estimates that the current account deficit will not expand by more than $2 billion.
$18 Billion in Damages From the Floods
He stated that world markets were “nervous” about Pakistan due to the fact that the country’s economy has suffered at least $18 billion in damages from the floods, which might reach $30 billion.
“Yes, our credit default risk has increased, and so have our bond prices. But…I believe that after fifteen to twenty days, the market will normalize and realize that Pakistan is dedicated to being smart.”
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Pakistan’s Next Major Payment
Pakistan’s next major payment, $1 billion in international bonds, is due in December, and according to Ismail, this payment will be “definitely” made.
The IMF announced on Sunday that it will collaborate with the international community to help Pakistan’s relief and reconstruction operations, as well as its efforts to safeguard stability.
External Financial Sources
Ismail stated that external financial sources, including nearly $4 billion from the Asian Development Bank (ADB), the Asian Infrastructure Investment Bank, and the World Bank, have been obtained.
This includes $1.5 billion next month from ADB’s Countercyclical Assistance Facility – a budget support tool – under the Countercyclical Support Facility.
In addition, the minister stated that around $5 billion in investments from Qatar, the UAE, and Saudi Arabia will materialize during the current fiscal year.
Investing in Pakistan
Earlier this year, the three companies expressed interest in investing in Pakistan, but no timeframes or specific plans have been disclosed.
In the next couple of months, $1 billion in UAE investment will “certainly materialize” in the form of stock market purchases in Pakistan, he added.
Qatari Investment Commitments
Approximately $3 billion in Qatari investment commitments will all be fulfilled by June 30, 2023, he added.
Sunday, Pakistan’s central bank stated that Saudi Arabia’s development authority has delayed by one year a $3 billion deposit due in December.
