July 30, 2020 (MLN): Pakistan has received $10.662 billion foreign assistance during FY20 from bilateral and multilateral development partners, foreign commercial borrowing, and commodity financing from Islamic Development Bank and Saudi Arabia.
This external inflows from multiple sources are around 82% of the budgeted amount of $12.958 billion for the entire fiscal year FY 2019-20. The gap between the budgetary target and the actual inflows is primarily because the government was unable to issue Eurobonds of amount $3,000 million in the international capital markets.
In 2018-19 the external inflows were $10.595 billion which surpassed budgeted amount of $9.692 billion. During the last quarter of the outgoing FY 2019-20, the disbursements of project aid from development partners dried up owing to COVID-19. The pandemic has closed down most of the economic activities across the country which also slowed down development project activities. However, ease in the lockdown by the Government may lead to jack-up the project financing in the coming months.
In spite of challenging circumstances, Pakistan through its vigorous efforts has managed to secure external inflows of $1.903 billion during the month of June,2020.
The government received a program loan of $500 million from World Bank for budgetary support, $500 million each from Asian Development Bank (ADB) & Asian Infrastructure Investment Bank (AIIB)for scaling up spending on health and social protection to mitigate Covid-19 adverse effects.
The aforementioned program loans are also expected to build foreign exchange reserves and stabilize Pak. rupee against the US dollar.
Total receipt of $10.662 billion constitutes $4 billion or 37% as program/budgetary support assistance from Asian Development Bank, World Bank, Korea and the U.K. to restructure Pakistan’s economy
While Pakistan received $3.373 billion (32%) as foreign commercial borrowing to repay maturing international Sukuk and other foreign commercial loans; and $1.694 billion (16%) as project assistance to finance its development projects activities for improving the socio-economic development of the country and for asset creation and the remaining $1.583 billion (15%) were received for commodity financing.
According to the monthly bulletin of Foreign Economic Assistance by Economic Affairs Division (EAD), Pakistan received around $6.521 billion as foreign economic assistance from bilateral and multilateral development partners during FY20 on concessional terms with longer maturity.
During FY20, the collective disbursement from bilateral donors amounted to $876 million.
A breakup of the funds received from bilateral sources shows that Pakistan received $487 million from China, followed by $128 million from the United Kingdom, $96 million from Korea, $75 million from the United States. Saudi Arabia gave $768 million worth of oil against the annual credit facility of $3.2 billion.
Foreign assistance obtained by Pakistan through multilateral sources during FY20 totaled $5.645 billion. Amongst the multilateral development partners, Asian Development Bank provided $2.824 billion, Islamic Development Bank $815 million, and World Bank $1.376 billion.
On external outflows front, during Jul-May FY20, total servicing of external public debt was $8.976 billion against the budgeted amount of $10.423 billion for the entire fiscal year. Of this, $7.361 billion (82% of total external public debt servicing) was repaid as principal and $1.615 billion (18%) as interest on the outstanding stock of external public debt.
The monthly bulletin revealed Pakistan settled $1.923 billion to multilateral and $725 million worth of external loans of bilateral development partners during the first eleven months of FY20.
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