December 17, 2020 (MLN): Pakistan has received foreign aid worth $4.50 billion during the first five months of the fiscal year 2020-21 from bilateral and multilateral development partners, foreign commercial borrowing, and time deposits to influence the process of development by increased investment in productive resources and transferring the modern technology.
This foreign aid in Pakistan is a major source of socio-economic & human development, capital formation which can trigger economic growth.
According to the data released by the Policy Analysis & Development Wing of EAD, these external inflows from multiple sources is around 37% of the annual budget estimates of $12.23 billion for the entire fiscal year FY 2019-21. In the corresponding period of the fiscal year 2019-20, the external inflows were $3.12 billion i.e. around 24% of the annual budgeted amount of $12.96 billion.
It is pertinent to mention that the economic activity is reviving post-COVID-19 lockdowns which may lead to jack-up the project financing in the current fiscal year 2020-21.
Details made available here on Thursday by Policy Analysis & Development Wing of EAD, out of $4.50 billion, the government received $1.30 billion or 29% in the form of program/budgetary support assistance to restructure Pakistan’s economy, $1.62 billion (36%) as foreign commercial borrowing to repay maturing international Sukuk and other foreign commercial loans, $518 million (12%) as project assistance to finance its development projects for improving the socio-economic development of the country and for asset creation and $60 million (01%) as short term credit while $1 billion (22%) received in terms of time safe deposits.
During Jul-Nov FY21, the bilateral and multilateral development partners have disbursed $1.88 billion of foreign economic assistance against the budgetary allocation of $5.81 billion for the fiscal year 2020-21 on concessional terms with a longer maturity, the monthly bulletin of Foreign Economic Assistance by Economic Affairs Division (EAD) reported.
Foreign assistance obtained by Pakistan through multilateral sources during July-Nov FY21 totaled $1.73 billion. Amongst the multilateral development partners, Asian Development Bank provided $712 million and World Bank $694 million against the budgetary allocation of $2.26 billion.
The monthly bulletin revealed that the collective disbursement from bilateral donors amounted to $151 million during July-Nov FY21 wherein Pakistan received $33.4 million from France, followed by the United States with $33.4 million and China with $21.8 million.
On the external outflows front, during July-Oct FY21, the total servicing of external public debt was $2.45 million against the annual repayment estimates of $10.36 billion for the entire fiscal year. Of this, $2.04 billion (83% of total external public debt servicing) was repaid as principal and $415 million (18%) as interest on the outstanding stock of external public debt.
During July-Oct FY21, the monthly bulletin disclosed that the government repaid $1.30 billion worth of foreign commercial loans. Similarly, Pakistan settled $695 million to multilateral and $102 million worth of external loans to bilateral development partners.
For the period Jul-October FY21, net transfers to the government were $144 million. Positive net transfers came mainly due to higher inflows from multilateral Development Partners. Interestingly, the stock of external loans that were obtained on market- based instruments has decreased by $618 million and the share of concessional external loans with longer maturity increased by $761 million, the bulletin revealed.
Copyright Mettis Link News
38695
