Karachi (Commerce Desk): Pakistan’s external economy is facing renewed pressure as a $1 billion Eurobond payment is expected immediately after Eid, raising concerns about foreign exchange reserves, external debt, and financial dependence.
According to the State Bank of Pakistan, by early 2026, Pakistan’s foreign exchange reserves are estimated to be between $8–9 billion. While this is an improvement compared to the 2023 crisis, it is sufficient for only 1.5 to 2 months of imports, which is below international standards.
Data from the Ministry of Finance, Pakistan indicates that Pakistan’s total external debt and liabilities have exceeded $125 billion, with over $25 billion in external financing requirements expected in the current fiscal year. The $1 billion Eurobond payment is considered a critical test of market confidence.
In recent years, Pakistan has relied on rollovers from friendly countries, support from international financial institutions, and limited domestic resources to meet its debt obligations. However, access to global bond markets has nearly closed due to weak credit ratings and high risk premiums.
The IMF program is currently playing a key role in stabilizing the economy, providing financial assistance and opening funding channels from other international institutions, though it comes with strict conditions and reforms.
Experts note that Pakistan’s core challenge is a weak export base. Exports are limited to $25–30 billion annually, while imports far exceed this, maintaining a persistent current account deficit. Remittances from overseas Pakistanis, reaching around $30 billion annually, provide crucial support but are not fully insulated from global economic conditions.
Economists emphasize that long-term reforms are essential rather than short-term measures, including boosting exports, increasing foreign investment, and enforcing fiscal discipline.
