Pakistan receives $471m external financing in October

November 19, 2025 (MLN): Pakistan secured external financing worth $471.2 million in October 2025 from multiple financing sources, 7.9% higher than last month and 13.6% higher than the same month last year.

Cumulatively, in 4MFY26, the country only managed to secure $2.29 billion in external financing, capturing barely 11.5% of the annual budget estimates of $19.92 billion, the latest monthly report by the Economic Affairs Division (EAD) showed.

Of the total $2.29 billion disbursed, an overwhelming $1.52 billion, or 66% went to non-project aid, primarily budgetary support, while only $773 million or 34% was allocated to actual development projects.

The Saudi Fund for Development's oil facility provided $400 million through October, making it the single largest contributor and highlighting Pakistan's dependence on petroleum import financing.

The Islamic Development Bank disbursed $361.43 million in short-term credit, further underscoring the country's reliance on quick-turnaround financing rather than long-term development capital.

Meanwhile, the Naya Pakistan Certificates, diaspora bonds designed to attract overseas Pakistani investment, contributed $734.71 million, representing 32% of total disbursements and emerging as a critical financing pillar.

Multilateral institutions provided $1.11 billion or 48.3% of total disbursements, led by the World Bank group at $347.5 million, the Asian Development Bank at $167.4 million, and the Islamic Development Bank at $411.6 million including short-term facilities.

Bilateral donors contributed $449.9 million or 19.6% of the total, but the composition reveals troubling trends in Pakistan's international relationships.

China's disbursements totaled just $9.75 million through October, a surprisingly low figure given Pakistan's strategic partnership with Beijing and the much-publicized China-Pakistan Economic Corridor framework.

Saudi Arabia provided $404.2 million including the oil facility, cementing its position as Pakistan's most reliable bilateral partner.

France contributed $15.61 million while Korea added $6.55 million, reflecting modest but consistent engagement from these partners.

The Saudi time deposit stands at $5 billion while China's SAFE deposit accounts for $4 billion, suggesting these are rollover arrangements rather than fresh financing, essentially placeholders that inflate the annual target without providing actual liquidity.

Even more concerning is the complete freeze in commercial borrowing. While the budget allocated $3.1 billion for foreign commercial bank loans, not a single dollar has been disbursed through October.

Major ongoing infrastructure projects are receiving funds, but at rates that suggest slow implementation or pipeline constraints. The Dasu Hydropower Project received $13.16 million from July through October, while the Karachi Urban Mobility Yellow Line project drew $55.89 million.

The Mohmand Dam Hydro Power project is receiving tranches from multiple sources including the Islamic Development Bank, Kuwait Fund, and Saudi Arabia, reflecting the project's strategic importance but also the need to cobble together financing from various partners.

Sindh's emergency housing reconstruction received $28.79 million from the Asian Development Bank, addressing urgent post-flood needs, while Punjab's Human Capital Investment project drew $9.07 million from the World Bank.

Copyright Mettis Link News