- Pakistan expects to raise $6.46 billion from Saudi Arabia in FY2025–26, making Riyadh its largest external financier.
- Saudi Arabia also leads in worker remittances to Pakistan, contributing $7.4 billion last year.
Saudi Arabia will become Pakistan’s largest external financier in the upcoming fiscal year, offering over $6 billion in support as Islamabad seeks to raise more than $20 billion from international lenders to stabilise its fragile economy. The figure comes from official budget documents released this week.
Beginning July 1, 2025, the Pakistani government plans to secure $6.46 billion from Riyadh. This includes $5 billion in time deposits, $1 billion in oil on deferred payment, and $46.4 million in direct economic assistance. The government aims to use these funds to strengthen its external account and meet its payment balance requirements.
Over the years, Pakistan has consistently relied on financial assistance from Gulf nations and China to bolster its foreign reserves and avoid default. In 2023, this support proved essential in helping the country avert a sovereign debt crisis.
Commenting on the development, Shankar Talreja, Head of Research at Karachi-based Topline Securities, said, “The support from Saudi Arabia, particularly in the form of deposits and the oil facility, clearly plays the most significant role in maintaining external stability.”
On June 10, the government unveiled its Rs17.6 trillion ($62 billion) federal budget for FY2025–26. It focused on consolidating what officials called fragile macroeconomic stability achieved through a $7 billion bailout from the International Monetary Fund (IMF). Notably, the budget does not allocate any fresh IMF funding, although Pakistan remains under a 37-month Extended Fund Facility approved last year.
The government has allocated Rs5.78 trillion ($20.4 billion) in foreign assistance for FY26, covering loans and grants from bilateral and multilateral partners. It projects external receipts to Rs20.3 trillion ($71.9 billion).
Meanwhile, China will follow as Pakistan’s second-largest lender, with expected inflows of $4.37 billion. This includes $4 billion in “safe deposits”, central bank support, and $37 million in economic assistance. Talreja explained, “China has acted as a major bilateral partner by providing commercial loans and deposits, which it typically refinances or renews annually.”
Moreover, multilateral development institutions such as the Asian Development Bank (ADB), World Bank, Islamic Development Bank (IsDB), Asian Infrastructure Investment Bank (AIIB), and agencies like the UN, OPEC Fund, and IFAD are also expected to contribute.
Additionally, Pakistan will seek smaller amounts from countries including the United States, France, Germany, Denmark, Italy, Japan, and South Korea. The budget also lists inflows from Kuwait ($21.4 million) and Oman ($5.14 million).
However, the much-anticipated Saudi oil facility, initially expected in 2023, has yet to materialise. Media reports suggest that Riyadh has tied its final approval to progress on its proposed investment in Pakistan’s Reko Diq copper and gold mine, located in Balochistan. In September, Saudi Arabia reportedly offered to acquire a 15% equity stake in the multibillion-dollar project, operated by Canada’s Barrick Gold.
Looking to diversify its external financing sources, Pakistan also plans to raise $1.3 billion through commercial loans and $400 million via international bond issuances. While the finance ministry has not disclosed the sovereign guarantees or instruments involved, Finance Minister Muhammad Aurangzeb confirmed plans to issue Panda bonds, yuan-denominated debt, to raise $200 million from Chinese investors.
In parallel, Pakistan continues to benefit from strong worker remittances, particularly from the Gulf. The Pakistan Economic Survey 2024–25 revealed that remittances from Saudi Arabia reached $7.4 billion last year, nearly 25% of the national total. Combined remittances from all six Gulf Cooperation Council (GCC) countries totalled $16.1 billion, making up over half of Pakistan’s total inflows in 2024.
The survey noted, “In the GCC region, expanding Saudi mega-projects led to higher migrant employment, further contributing to inflows.”
Talreja emphasised the broader picture: “It’s not just about deposits and oil facilities. Remittances from Saudi Arabia alone make up a quarter of all remittances received by Pakistan.”
Sana Tawfik, Head of Research at Arif Habib Ltd., concluded, “Saudi Arabia remains Pakistan’s most crucial partner when it comes to foreign inflows, whether through financial aid, strategic deposits, or the hard-earned money of Pakistani workers abroad.”