Moody’s has issued a warning that the terms of new multilateral lending in Pakistan are likely to increase societal hazards. According to the agency’s projections, interest payments in Pakistan are expected to increase from over 25% of total expenditures in 2021 to nearly 40% by 2025.
Pakistan recently agreed to a new $7 billion initiative with the International Monetary Fund (IMF) to assist alleviate liquidity concerns, according to Moody’s assessment, “2025 Outlook – Stable as Economic Risks Recede, Geopolitical and Trade Risks Persist.”
However, the maturing debt of sovereigns might not be entirely covered by borrowing from concessional lenders. Furthermore, it can be difficult to meet the requirements of new multilateral financing, which could increase societal risks.
