Pakistan receives $1.47bn external financing in December

January 21, 2026 (MLN): Pakistan secured external financing worth $1.47 billion in December 2025 from multiple financing sources, 1.9x  higher than last month and 56.2% higher than the same month last year.

Cumulatively, in 6MFY26, the country only managed to secure $4.5 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 $268.66m in loans and the remaining $9.39m in grants from various sources.

Going into details made available by EAD, the disbursement from bilateral and multilateral development partners totaled $972.72m in December and $3.04bn during 6MFY26.

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 $708.87m in December and $1.97bn in 6MFY26. While financing through bilateral development partners stood at $263.85m in December and $1.07bn in 6MFY26.

The Asian Development Bank (ADB) maintained its position as the leading multilateral donor, disbursing $307.14m in December and $549.24m from July to December.

The significant December disbursement of $305.18m demonstrates ADB's continued commitment to infrastructure development initiatives across provinces.

The International Development Association (IDA) disbursed $237.62m in December, with cumulative disbursements reaching $580.77m.

Major IDA-supported projects continue to include the Dasu Hydropower Project and the Sindh Water Sector Agriculture & Transformation Project.

The International Bank for Reconstruction and Development (IBRD) contributed $39.89m in December, bringing its six-month total to $221.73m, primarily supporting power sector and urban development projects.

Among bilateral donors, China remained a significant contributor with $72.28m disbursed during July-December, including $61.71m for the Pakistan Multi Mission Satellite project, with an additional $0.57m disbursed in December.

Denmark's cumulative assistance remained at $71.15m for the construction of the Eastern Waste Water Treatment Plant in Faisalabad, with no disbursement recorded in December.

France maintained its cumulative disbursements at $15.61m across multiple hydropower and infrastructure projects, with no new disbursements in December.

Japan contributed $11.86m during the six-month period, supporting educational facilities reconstruction in flood-affected areas of Sindh and maternal healthcare projects, including $0.77m disbursed in December.

South Korea's assistance totaled $9.49m, primarily for the Technology Parks Development Project in Islamabad, with $2.72m disbursed in December.

Kuwait emerged as a notable contributor with $22.06m in cumulative assistance, disbursing $20.71m in December alone.

Saudi Arabia provided $8.70m cumulatively, with $1.89m disbursed across various development projects in December.

Germany's total assistance reached $5.15m during the six-month period, with $1.37m disbursed in December.

The foreign commercial borrowing amounted to $236.18m in December 2025 and $1.2bn in 6MFY26. This was obtained through Naya Pakistan Certificate.

Meanwhile the government  managed to secure $56.3m  through foreign commercial banks in 6MFY26 against the government's budget estimates of $3.78bn for fiscal year 2024-25 and $209.51m through IMF.

To note, out of the total financing amount in December, the government obtained a $905.85m loan for non-project aid, which was in the form of program/budgetary support assistance to restructure Pakistan's economy. Cumulatively in 6MFY26, loans for non-project aid amounted to $2.78bn.

The Islamic Development Bank (IsDB) short-term credit facility provided $100m in December and $483.78m during the six-month period, supporting trade financing requirements.

Major provinces benefited from various development projects, with Punjab, Sindh, and Khyber Pakhtunkhwa receiving substantial allocations for urban development, water management, education, and health sector improvements.

Copyright Mettis Link News