Foreign loans surge to $4.7bn in 5MFY22

December 24, 2021 (MLN): Pakistan received fresh external loans of $4.70 billion in the first five months of the ongoing fiscal i.e., July- Nov FY22 from multiple financing sources against the annual budget estimates of $14.09bn for the entire fiscal year FY22, the latest monthly report by the Economic Affairs Division (EAD) showed.

In the month of November, the country got foreign assistance of $802.37 million from multilateral sources.

Out of $4.70bn, the government obtained $2.97bn in the form of program/budgetary support assistance to restructure Pakistan’s economy, $468.5mn for short-term credit, and $18.41mn for TDPs while $1.24bn has been obtained for project aid financing.

Going into details made available by EAD, the disbursement from bilateral and multilateral development partners maintained a strong trend as it totaled $2.13bn of foreign economic assistance during 5MFY22. These healthy inflows also helped to improve foreign exchange reserves.

The Ministry of Economic Affairs noted the country relied on foreign commercial borrowing as it was recorded at $1.53bn that included a $720mn from Dubai Bank, $61mn from Ajman Bank, $478.2mn loan from Standard Chartered Bank London while Suisse AG, UBL & ABL provided $270.50mn during July-NovFY22.

Similarly, the country received $1.04bn from bonds issuance during the said period.

During July-Nov FY22, the foreign assistance obtained by Pakistan through multilateral sources totaled nearly $2bn. Amongst the multilateral development partners, International Development Association-World Bank (IDA) provided $739.15mn, followed by Asian Development Bank (ADB) with $620.3mn. While the country secured $468.53mn from Islamic Development Bank (IDB) as short-term finance during 5MFY22.

The monthly bulletin revealed that the collective disbursement from bilateral donors amounted to $128.74mn during July-Nov FY22 wherein Pakistan received $73.35mn from China, followed by the United States with a grant of $29.23mn, the United Kingdom with $10.01mn while Japan gave $5.15mn during the period under review.

Increased level of external inflows from multilateral and bilateral development partners is indicative of their confidence in development priorities and policies of the government including implementation of reforms in the priority areas of fiscal and debt management, energy sector, and ease of doing business.

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