UAE demands return of $1 billion loan to Pak, sends PM Khan into panic as deadline nears

Sending shockwaves across Pakistan, United Arab Emirates (UAE) has demanded its USD 1 billion back from debt-ridden economy led by PM Imran Khan. middle-eastern country has set Friday as deline day for Pakistan to return whopping USD 1 billion amount which it h loaned from UAE. According to reports, amount h been deposited with State Bank of Pakistan (SBP) and has now reached its maturity. 

As per several reports, top Pakistani officials have me repeated attempts to reach out to Crown Prince, seeking an extension in time to return loan. Islamab has cited its debt-ridden economy and impact of COVID-19 pandemic as a reason behind delay in return of loan amount. According to World Bank estimate, amid COVID pandemic, Pakistan’s real GDP growth is estimated to have declined from 1.9 per cent in FY19 to -1.5 per cent in FY20.

Pakistan's debt continues to rise

Last year, Pakistan h managed to pay back part of a loan secured from Saudi Arabia after its all-wear friend - China - h come to Imran Khan's rescue. With China's help, Pakistan paid back USD 1 billion out of USD 3 billion loan it h secured back in 2019 to avoid default on international debt obligations. 

As per reports, Islamab h sought Beijing's help to return USD 1 Billion to avoid any verse impact of partial withdrawal of Saudi lifeline. In October 2018, Saudi Arabia h agreed to provide $6.2 billion worth of financial package to Pakistan for three years. 

According to State Bank of Pakistan (SBP), foreign debt and liabilities of Islamab have increased by USD 3 billion till December 2020. Till December, external debt and liabilities totalled USD 115.7 billion compared to USD 112.7 billion till June end. As per reports, Imran Khan-led government has received USD 6.7 billion in gross foreign loans itself in 2020-21, which includes a new loan from Beijing worth USD 500 million.