Qatar Wealth Fund Announces $3 Billion Investment in Cash-Strapped Pakistan

Pakistan's foreign exchange reserves plummeted below $8 billion — barely sufficient for five weeks of imports. The current account deficit shrank to $1.2 billion in July from $2.2 billion in June, mainly reflecting a sharp decline in energy imports and continued moderation in other purchases.

A Qatari wealth fund has planned a $3 billion investment in Pakistan amid growing threats of a balance of payments crisis in the South Asian country.

The investment might occur in the transport, renewable energy, and hospitality sectors.

"His Highness stressed the importance of the brotherly and strategic relations between the two countries and their aspiration to enhance economic partnership by raising trade exchange and promoting investments through the Qatar Investment Authority," Amiri Diwan, the administrative office of the Amir, said.

In the last two days, Pakistan Prime Minister Shehbaz Sharif met with several Qatari officials in Doha to receive support to revive the economy.

On Monday, the State Bank of Pakistan (SBP) said the country has secured an "additional $4 billion from friendly countries over and above its external financing needs in Financial Year 2022-23."

Besides Qatar, the UAE and Saudi Arabia have reportedly pledged $1 billion each to support the Pakistani economy.

The financial help from these Gulf States comes ahead of possible $1.2 billion in loans from the International Monetary Fund (IMF).

The State Bank of Pakistan, in its monetary policy statement, mentioned that the executive board of the IMF is scheduled to meet on August 29 and "is expected to release a further tranche of $1.2 billion, as well as catalyzing financing from multilateral and bilateral lenders."

The Shehbaz Sharif government has taken several steps to curb luxury imports and reduce fuel subsidies to bring the economy back onto a sustainable path.