CPEC: How much annual revenue Pakistan will earn
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Pakistan Chief economist in the Planning Division Javed while giving an interview to Reuters has said debt repayments and profit repatriation from CPEC projects will begin in 2019, totalling about $1.5-$1.9bn and rising to $3-$3.5bn by the following year.
“It would be low in the beginning, and in 2022 it will peak at around $5 billion — not more than that,” he said, adding the government does not think it likely that Pakistan will face a balance of payments crisis.
The last such crisis in 2013 saw Islamabad turn to the International Monetary Fund for help.
Javaid said the CPEC should boost economic growth, which he expects to hit 5.2pc in 2016-17. Exports should also pick up once CPEC power projects totalling 7,000 megawatts come online and reduce often crippling energy shortages.
Deepening political and military ties between Pakistan and China have helped closer financial integration, too, with Chinese companies starting to buy Pakistani firms and land.
Javaid said the two countries have also discussed using a currency swap agreement between their central banks to create a mechanism to avoid any third currency in international transactions.
“If some mechanism is going to be finalised on that, it will work as a buffer or a cushion that's going to basically avoid or prevent any kind of default that could happen in unforeseen circumstances,” he said.
But he added: “It's only a contingency arrangement in case something bad happens.”
