The proposed facility would strengthen Pakistan’s foreign exchange reserves
Pakistan narrowly avoided a sovereign default in 2023 after securing a $3 billion IMF standby arrangement, followed by a $7 billion Extended Fund Facility and a separate $1.3 billion climate resilience loan. Against that backdrop, a $10 billion US-backed stabilisation facility would represent one of Islamabad’s biggest attempts in recent years to secure bilateral financial support and strengthen its economic recovery.
The ministry said he sought greater US support for Pakistan’s return to international capital markets through higher foreign exchange reserves, stronger sovereign credit ratings and increased investment. Both sides also reaffirmed their commitment to expanding bilateral economic cooperation and advancing strategic projects. However, the country’s external finances remain heavily dependent on IMF support, debt rollovers and deposits from key partners including China and Saudi Arabia. Economists say Pakistan’s economic difficulties stem from decades of weak policy management, persistent fiscal deficits and rapid population growth, which have constrained savings, investment and long-term growth. The country has also struggled with mounting public debt, while interest payments consume a large share of government revenue, leaving limited room for spending on health, education and infrastructure. analysts caution that Pakistan continues to face significant financing needs and a heavy external debt repayment burden Although IMF-backed reforms have helped stabilise the economy by restoring reserves and easing pressure on the rupee.