As Pakistan gets ready for talks with the International Monetary Fund (IMF), the government has asked for Saudi Arabia oil facility for a $1 billion, with deferred payment, starting in January 2024.

The facility is part of Pakistan’s financing plan under the $3 billion Standby Arrangement (SBA) worked out with the IMF. The Saudi Arabia oil facility is set to expire in December of this year. So far, Pakistan has received $300 million in the last three months (July–September) of the current fiscal year.

The government is in discussions with ally for Saudi Arabia oil, and the exact terms and conditions of this facility will be decided in the coming months. This request aligns with Pakistan’s strategy to meet its financial needs.

In related news, there have been developments with the Islamic Development Bank’s (IsDB) pledge of $3.3 billion under the ITFC mechanism. Initially, the bank was supposed to provide $1 billion during the current fiscal year, but it may now reduce that amount to around $250–500 million in syndicated loan facilities due to various challenges.

The Ministry of Finance is actively preparing for the upcoming talks with the IMF, which are expected in the first 10 days of November. The exact schedule for the IMF’s review mission is yet to be confirmed.

The finance ministry is making significant efforts to manage the budget deficit and has encouraged provinces to cut down their spending. However, another challenge is the rising debt servicing requirements, which are expected to exceed the initially targeted amount due to an increase in the central bank’s policy rate.

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