Saudi Arabia pledges $3bn to support Pakistan’s economy

It also agreed to provide up to another $3 billion on deferred payment for import of oil, the statement added.

The agreement came between the two countries during a visit by Prime Minister Imran Khan to Riyadh where he met King Salman bin Abdulaziz.

Khan also attended a Saudi Arabian investment conference where the new Pakistani leader launched a charm offensive targeting potential investors as Pakistan continues to seek funding to plug its deteriorating finances.

The two countries “agreed Saudi Arabia will place a deposit of $3 billion for a period of one year as balance of payment support”, said the statement.

“It was also agreed that a one year deferred payment facility for import of oil, up to $3 billion, will be provided by Saudi Arabia.

“This arrangement will be in place for three years, which will be reviewed thereafter.”

During his address at the Future Investment Initiative (FII) in Riyadh, Khan confirmed that Pakistan was also in talks with the International Monetary Fund (IMF) over a new bailout.

Since taking power in August Khan has also sought loans from allies such as China and Saudi Arabia, promised to recover funds stolen by corrupt officials, and embarked on a series of high-profile populist austerity measures.

But help has been in short supply and economists’ warnings have grown increasingly urgent.The Saudi pledge comes days after Pakistan’s central bank warned inflation could double in the coming year — hitting 7.5 percent — while the country’s growth target rate of 6.2 percent would likely be missed.

Pakistani finance minister  Asad Umar on Saturday warned the country was fast heading towards bankruptcy.However, he promised to end the country’s reliance on International Monetary Fund bailouts to shore up its shaky economy, as officials prepared to negotiate a new loan.

An IMF team is set to arrive in Pakistan in early November to begin negotiations.