China Gives Pakistan a $2 Billion Loan Despite Financial Difficulties

As Pakistan looks for financial stability in the wake of IMF bailout evaluations, China rolled over a $2 billion loan to the nation.

China has extended a $2 billion loan to Pakistan, giving the nation much-needed financial support while it works through its economic difficulties. Pakistan’s finance minister’s adviser, Khurram Schehzad, acknowledged the news on Saturday.

Following a $7 billion rescue from the International Monetary Fund (IMF) in September 2024, Pakistan is now working to stabilize its economy as a result of the loan extension. The first payment of the bailout is still being reviewed; a favorable evaluation could open up an extra $1 billion in funding.

An essential prerequisite for Pakistan to receive IMF rescue packages has been obtaining outside funding. The nation has substantial debt obligations; in the fiscal year 2025, external repayments of more than $22 billion are due. This includes over $13 billion in bilateral deposits, according to Fitch Ratings.

Due to increasing financial strains, Pakistan keeps looking for outside help to manage its economic recovery and fulfill its financial obligations.