Islamabad, March 08, 2025 – In a significant relief to Pakistan’s economy, China has extended the repayment period for a $2 billion loan by one year, the Ministry of Finance confirmed on Saturday.
The loan, originally due for repayment on March 24, 2025, has been deferred, providing Pakistan with much-needed financial breathing space as the country grapples with economic challenges, including pressure on its foreign exchange reserves and a widening fiscal deficit.
Financial Relief Amid Economic Uncertainty
Pakistan has been struggling with economic instability, rising inflation, and external debt obligations, making timely loan repayments increasingly difficult. The extension of this loan by China will ease pressure on Pakistan’s forex reserves, ensuring stability in the exchange rate and preventing a further depletion of financial resources.
The Finance Ministry appreciated China’s support, highlighting that such measures reflect the strong bilateral relationship between Pakistan and China. “China has always been a reliable partner in Pakistan’s economic progress, and this loan repayment extension further strengthens our financial cooperation,” the ministry stated.
Strategic Economic Move
This extension comes as Pakistan engages with international lenders, including the International Monetary Fund (IMF), for continued financial assistance. It will allow Pakistan to focus on economic reforms while reducing the immediate burden of debt repayments.
Experts believe that this decision will positively impact market sentiment, investor confidence, and the stability of the Pakistani Rupee. Analysts also see this as a strategic move by China to support Pakistan amid ongoing economic restructuring efforts.
Looking Ahead
Pakistan’s economic team is working on long-term strategies to boost exports, attract foreign direct investment (FDI), and strengthen trade relations to ensure sustainable economic growth. With the support of friendly nations like China, Pakistan aims to navigate through its current financial crisis and achieve long-term stability.
