Pakistan’s $2 Billion Loan Repayment Extended by ‘All-Weather Friend’ China

BEIJING – China’s loan deferment provides critical relief to Pakistan amid a plethora of financial challenges.

As Islamabad is on path of economic revival, Beijing agreed to extend the repayment period of $2 billion loan to Pakistan by one year, finance ministry confirmed the development, noting that the loan, originally due for repayment on March 24, will now be deferred to help support Pakistan’s economic stability and recovery efforts.

This extension is said to assist Pakistan in maintaining its foreign exchange reserves and strengthening its financial stability. China is a key economic ally of Pakistan, and has been a significant partner in providing financial assistance and investments, particularly through the China-Pakistan Economic Corridor (CPEC) initiative.

Officials say the delay in repayment will ease immediate financial pressures, allowing the government to focus on stabilizing the economy.

As of March 2025, Pakistan pushed with macroeconomic reforms as IMF started its first review under a $7 billion loan program.

The country with $350billion has seen improvements in key indicators, including a low consumer price index, a current account surplus of $682 million, and strong performance in stock market.