Top officials of the Pakistan government are in panic mode after United Arab Emirates (UAE) demanded its $1billion back.
The amount is deposited with the State Bank of Pakistan (SBP), the central bank of the country. The deadline to return the $1bn is 12 March. The money is demanded as the amount has reached its maturity.
Multiple attempts have been made to reach out to UAE, especially to Crown Prince Mohammed bin Zayed Al Nahyan, by top Pakistani officials.
So far there hasn’t been any response. Pakistani has pleaded to UAE that returning such a huge amount can impact its economic situation right now.
It is no secret that Pakistan’s economy is in dire straits. According to a World Bank estimate, amid the Covid pandemic, Pakistan’s real GDP growth is estimated to have declined from 1.9 % in financial year 2019 to -1.5% in FY2020.
Earlier this year, IMF and Pakistan had reached a staff-level agreement to release $500 million as part of a larger loan pact.
The year 2019 saw the international financial institution agreeing to provide a $6bn loan to the country to rein in the debt crisis in exchange for reform measures.