New Delhi, April 4 (IANS) Pakistan’s already weak economy is coming under fresh pressure as the country prepares to repay $3.5 billion to the United Arab Emirates this month, even as relations between the two sides show signs of strain.

According to a report by The Express Tribune, Islamabad has decided to return the loans in phases throughout April.

The report said that around $450 million will be paid next week, followed by $2 billion and another $1 billion later in the month.

The move comes after months of uncertainty over these loans. Unlike in the past, when Gulf countries often gave Pakistan more time to repay, the UAE had only been extending the loans for short periods. This change signals a tougher stance from a long-time ally.

The repayment is expected to put pressure on Pakistan’s foreign exchange reserves, which are already under stress.

Using reserves to pay back such a large amount could weaken the country’s ability to manage its external finances.

The situation has become more serious due to recent tensions with United Arab Emirates. Reports suggested that Abu Dhabi is unhappy with Pakistan’s perceived closeness to Iran during the ongoing regional conflict.

This has raised questions among Emirati officials about Pakistan’s foreign policy priorities.

These tensions could also affect future financial support. A separate $2 billion assistance package from the UAE is now seen as uncertain, the report said.

Pakistan continues to rely heavily on support from friendly countries as part of its programme with the International Monetary Fund.

Nations like Saudi Arabia, the UAE and China have been helping by maintaining deposits to support Pakistan’s economy.

However, the latest developments suggest that such support is no longer guaranteed and may come with stricter conditions.

Even within the country, there is growing concern over this dependence. Prime Minister Shehbaz Sharif recently admitted that repeatedly seeking financial help from other countries affects national “self-respect,” as lenders often expect something in return.

With exports declining, investment slowing, and debt repayments rising, the $3.5 billion repayment highlights deeper economic challenges, as per the report.

–IANS

pk