Pakistan gets $8bn lifeline from Saudi Arabia to revive ailing economy

ISLAMABAD – Saudi Arabia has extended an $8 billion financial package to bail out Pakistan after Prime Minister Shehbaz Sharif called on the Saudi crown prince during the maiden visit.

The News reported that the wealthy Arab country will provide Islamabad with a financial support package of around $8 billion including doubling the oil financing facility, and providing additional funds through deposits or Sukuks.

The Kingdom also agreed to roll over the existing deposits of $3 billion for an extended period up to June 2023. Meanwhile, the technical details are being worked out and are expected to take a couple of weeks, per reports.

Finance minister Miftah Ismail also shared a tweet, saying “The Kingdom of Saudi Arabia affirmed its continued support to Pakistan and its economy including the discussion of augmenting the three billion USD deposit with the central bank through term extension or otherwise, and exploring options to further enhance the financing of petroleum products and supporting the economic structural reforms for the benefit of Pakistan and its people. Pakistan greatly appreciates the continued strong support of the Kingdom of Saudi Arabia to Pakistan.”

The financial grant will boost dwindling forex reserves and help in recovering the dilapidating economy as the country facing several economic woes mainly soaring inflation, sliding forex reserves, and a widening current account deficit.

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Last year, Kingdom extended $3 billion deposits to Pakistan’s central bank. In the previous regime, Saudi Arabia provided a package of $4.2 billion, including $3 billion deposits and a $1.2 billion oil facility for one year, and linked it with an IMF programme.