Riyadh, 11 January 2023 (TDI): According to the Saudi Foreign Ministry, Saudi Arabia will increase its investments in Pakistan to reach $10 billion and raise its deposits at Pakistan’s Central Bank to $5 billion as part of measures to support the struggling economy.

The Crown Prince of the Kingdom of Saudi Arabia, Mohammad bin Salman has directed the Saudi Development Fund (SDF) to increase investments to $10 billion from the previous $1 billion announced in August 2022 at the Pakistan Central Bank; the State Bank.

The announcement follows discussions between Crown Prince Mohammad bin Salman and Prime Minister Mian Muhammad Shahbaz Sharif.

Previously, the State Bank of Pakistan signed a $3 billion agreement with the Saudi Fund for Development (SFD) to improve foreign exchange reserves in 2021.

Saudi Arabia extended the terms of that existing $3 billion deposit in the central bank in December 2022. In the year 2022, the nation experienced a sharp change in the form of a record-high inflation rate and devastation from floods.

The crisis has created significant economic difficulties for months, which has caused an increase in the cost of food, gas, and oil.

The State Bank of Pakistan’s reserves were at $11.425 billion at the end of March 2022, but they steadily declined to a nearly four-year low of $6.715 billion on 2 December 2022.

According to the World Bank‘s October 2022 Press Release, Pakistan’s economy is expected to grow by only 2 percent in the current fiscal year ending June 2023.

The slower growth will reflect damages and disruptions caused by catastrophic floods, a tight monetary stance, high inflation, and a less conducive global environment.

Recovery will be gradual, with real GDP growth projected to reach 3.2 percent in the fiscal year 2024.

During the same time, Pakistan received nearly $9 billion in promises from international financial organizations, donor organizations, and development partners for the restoration, recovery, and reconstruction of flood-affected areas during the International Conference on Climate Resilience in Geneva.