Government expects to borrow $9.69 billion from foreign assistance: EAD

September 7, 2018 (MLN): Government of Pakistan expects Foreign Economic Assistance by means of grants and loans to the tune of $9.69 billion for the fiscal year 2018-19, according to the Economic Affairs Division of the Ministry of Finance.

According to budget estimates of Foreign Economic Assistance, the bulk of that financing would be coming from Bond Holders, and Commercial Banks, which are expected to generate $3 billion and $2 billion for the government respectively.

Asian Development Bank is expected to contribute $1.38 billion in total, the bulk of it in the form of loans, while China is expected to provide close to $841 million to the country, of which close to $13 million are expected in the form of grants, with the remainder coming in as loans.

Provisional disbursements already taken place for the month of July have recorded close to $290 million in loans already disbursed to Pakistan from China while ADB has provided $27.45 million so far up till July.

In total, the government has borrowed $468 million in the form of grants and loans from foreign countries and international institutions during the first month of the current fiscal year.

Islamic Development Bank is also expected to lend up to $1 billion to the country on a short-term basis, besides $21.2 million for a longer-term maturity. Payments on that front have not been cashed in so far, according to data released by the EAD.

Other major sources of potential funding include the World Bank, $620 million from which are expected to be raised via its International Development Association arm in the current fiscal year. This is in addition to the $202 million expected from the International Bank for Reconstruction and Development (IBRD), which is the World Bank’s original lending arm.

The largest share of grants, rather than loans, is expected to come from UK, to the tune of $157 million, of which $9.19 million were disbursed in July. USA too is expected to provide $91 million in grants and has already provided $14.2 million during July.

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