Pakistan PM in panic mode as UAE demands back $1 billion loan

New Delhi : In a big jolt, the United Arab Emirates (UAE) has asked Pakistan to return USD 1 billion loan which has reached its maturity date. The last date to return the loan was March 12.

According to several reports, it has been learned that the Pakistan authorities are making efforts to hold talks with UAE, specially to crown Prince to get an extension in the deadline. However, no response has been received yet as returning such a big amount will leave a huge dent on the country's economy.

In their request to extend deadline, the Pakistani authorities have quoted debt-ridden economic situation amid coronavirus pandemic as the reasons.

It has asserted that returning such a huge amount can impact its economic situation right now. According to the World Bank estimate, amid the covid pandemic, Pakistan’s real GDP growth is estimated to have declined from 1.9 % in FY19 to -1.5 % in FY20.

Earlier this year, IMF and Pakistan reached a staff-level agreement to release $500 million as part of the larger loan pact. 2019 saw the international financial institution agreeing to provide a $6 billion loan to the country to rein in the debt crisis in exchange for reform measures.