Pakistan Receives $2.89 Billion in Foreign Loans in July

Pakistan has secured loans totaling $2.891 billion in July 2023, according to data released by the Economic Affairs Division (EAD). This borrowing comes as part of the annual budget estimates of $17.62 billion for the current fiscal year 2024.

The data further reveals that the government has allocated $17.619 billion from various financing sources for the ongoing fiscal year, including $17.384 billion in loans and $234.60 million in grants.

During the fiscal year 2022-23, Pakistan borrowed $10.844 billion from multiple financing sources, which included $2.206 billion from foreign commercial banks. This amount falls short of the budgeted foreign assistance of $22.817 billion. However, the $10.844 billion figure doesn’t encompass the rollover of friendly countries’ deposits, such as $3 billion each from China and Saudi Arabia, and the re-financing of Chinese loans amounting to $1.3 billion.

Notably, $2 billion of the $2.891 billion borrowed in July 2023 came from Saudi Arabia under the category of a time deposit. The data also indicates that the government had budgeted $4.5 billion from foreign commercial banks for the fiscal year 2023-24, but no funds were received under this category in July.

Out of the $2.891 billion, $2.25 billion was obtained as a loan for non-project aid. This includes $2.08 billion for program/budgetary support assistance aimed at restructuring Pakistan’s economy, $67.23 million for short-term credit, and $640.11 million for project aid financing during the month.

Furthermore, bilateral and multilateral development partners contributed $307.52 million in disbursements during July, bolstering foreign exchange reserves. The Ministry of Economic Affairs noted that Pakistan’s foreign commercial borrowing amounted to $2.07 billion, which included a $2 billion time deposit and $74.7 million from Naya Pakistan Certificate in July 2023.

Among the multilateral development partners, CATIC (PAF) provided $508.34 million, followed by International Development Association-World Bank (IDA) with $82.71 million, IsDB (Short-term) with $67.23 million, Asian Development Bank (ADB) with $22.59 million, and Asian Infrastructure Investment Bank (AIIB) with $11.74 million.

From bilateral donors, Pakistan received $100 million from Saudi Arabia, $8.17 million from the USA, $4.85 million from Korea, $0.56 million from France, $0.17 million from Germany, and $0.13 million from Japan, making the total disbursement from bilateral donors $113.88 million for the month.