Pakistan secures just $270m in external loans during Aug

September 25, 2024 (MLN): The government received just $270.53 million in external financing in August, 39.1% lower than last month and 14.4% lower than the same month last year.

Cumulatively, in 2MFY25, the country only managed to secure $714.74 million external financing against the annual budget estimates of $19.39bn for FY25, 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 $228.12m in loans and the remaining $42.41m in grants from various sources.

The full-year $19.39bn target for the current fiscal year includes $5.05bn from multilateral and bilateral lenders, $1bn in international bonds, $3.78bn foreign commercial loans, $5bn time deposit from Saudi Arabia, and $4bn safe deposit from China.

Going into details made available by EAD, the disbursement from bilateral and multilateral development partners totaled $139.18m in August and $455.69m during 2MFY25.

Although these inflows helped to improve foreign exchange reserves, they fell significantly short of the government's budget estimates.

Foreign assistance obtained by Pakistan through multilateral sources totaled nearly $88.32m in August and $292.99m in 2MFY25. The total financing through bilateral development partners stood at $50.86m in August and $162.7m in 2MFY25.

The foreign commercial borrowing amounted to $131.35m in August 2024 and $259.04m in 2MFY25. This was obtained through Naya Pakistan Certificate.

Meanwhile, the government did not manage to secure any amount through foreign commercial banks in 2MFY25 against the government's budget estimates of $3.78bn for fiscal year 2024-25.

To note, out of the total financing amount in August, the government obtained a $145.42m loan for non-project aid, which was in the form of program/budgetary support assistance to restructure Pakistan's economy. Cumulatively in 2MFY25, loans for non-project aid amounted to $273.12m.

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