Pakistan receives $680m external financing in August

September 26, 2025 (MLN): Pakistan secured external financing worth $679.79 million in August 2025 from multiple financing sources, 2.1% lower than last month and 151.3% higher than the same month last year.

Cumulatively, in 2MFY26, the country only managed to secure $1.38 billion external financing against the annual budget estimates of $19.39bn for FY26, the latest monthly report by the Economic Affairs Division (EAD) showed.

Last year, the government had budgeted $17.62bn foreign assistance but could only materialise $9.81 throughout the fiscal year. 

The total amount comprised $675.67m in loans and the remaining $18.86m in grants from various sources.

For fiscal year 2025-26, Pakistan had budgeted $19.92bn in external assistance. The July-August combined disbursement of $1.38bn represents approximately 6.9% of the annual target, indicating either a slow start to the fiscal year or potential challenges in meeting annual projections.

August 2025 alone contributed $680m, representing 3.4% of the annual budget.

In August 2025, multilateral institutions remained the primary source of external financing, contributing $400.59m out of the total $679.78m.

The World Bank Group (IBRD/IDA) provided $228.43m, continuing as the largest contributor with substantial project and program financing.

The Asian Development Bank (ADB) disbursed $89.5m, maintaining significant involvement across infrastructure and social sectors.

The Islamic Development Bank (IsDB) contributed $311.43m, primarily through short-term trade financing facilities.

Going into details made available by EAD, the disbursement from bilateral and multilateral development partners totaled $511.46m in August and $1.01bn during 2MFY26.

Although these inflows helped to improve foreign exchange reserves, they fell significantly short of the government's budget estimates.

Foreign assistance obtained through multilateral sources totaled nearly $400.59m in August and $780.47m in 2MFY26. While financing through bilateral development partners stood at $110.87m in August and $232.37m in 2MFY26.

The foreign commercial borrowing amounted to $168.33m in August 2025 and $364.55m in 2MFY26. This was obtained through Naya Pakistan Certificate.

Meanwhile, the government did not manage to secure any amount through foreign commercial banks in 2MFY26 against the government's budget estimates of $3.78bn for the fiscal year 2024-25.

To note, out of the total financing amount in August, the government obtained a $448.06m loan for non-project aid, which was in the form of program/budgetary support assistance to restructure Pakistan's economy. Cumulatively in 2MFY26, loans for non-project aid amounted to $448.06m.

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