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Pakistan seeks billions of dollars in new loans after floods: Report

Wednesday, 19 October 2022 6:29 AM [ Last Update: Wednesday, 19 October 2022 6:29 AM ]

Displaced people walk on a flooded highway, following rains and floods during the monsoon season in Sehwan, Pakistan, September 16, 2022. (Photo by Reuters)

Pakistan will ask international lenders for billions of dollars in loans after devastating floods exacerbated the South Asian nation's economic crisis, the Financial Times reported on Wednesday.

"We are not asking for any kind of measure [such as] a rescheduling or a moratorium," the country's Prime Minister Shehbaz Sharif told the Financial Times. "We are asking for additional funds."

The country needs "huge sums of money" for "mega undertakings" such as rebuilding roads, bridges and other infrastructure damaged or washed away, the FT quoted Sharif as saying.

Sharif did not specify the amount Pakistan is seeking, but repeated an estimate of $30 billion of flood losses, the report said.

Pakistan declares emergency as devastating floods affect millions

The government of Pakistan has declared a state of emergency to deal with the monsoon floods that have hit areas across the country.

Earlier this month, the United Nations raised its humanitarian aid appeal for Pakistan five-fold to $816 million from $160 million, as a surge in water-borne diseases and fear of growing hunger pose new dangers after the unprecedented floods.

The European Union also scaled up its flood assistance to 30 million euros ($29.57 million).

A decline in Pakistan's currency is also pushing up the cost of imports, borrowing and debt servicing, and will further exacerbate inflation already running at a multi-decade high of 27.3%.

The estimated $30 billion in damage to the economy from the floods along with rising concerns about Islamabad's ability to raise money to meet external financing requirements has worsened the situation.

($1 = 1.0145 euros)

(Source: Reuters)

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