Pakistan’s foreign borrowing reaches $5.8 billion during 9MFY19

May 3, 2019 (MLN): Pakistan has received nearly $2.9 billion economic assistance in the form of bilateral and multilateral foreign loans and grants in the month of March 2019, reported the Economic Affairs Division (EAD) in its monthly report on disbursement of foreign assistance.

The total loan and grant disbursement from July through March of FY19 stood at $5.8 billionn for budgetary support, project financing and meeting external financing requirements. This 9-month disbursements are about 60% of the budgetary estimate of $9.7 billion for the year.

Foreign assistance extended from multilateral sources during the month adds up to $176 million, with the IDB (S-term) emerging as the main source having lent $117.6 million. This pushes up total disbursement from IDB (S-term) in last nine months to $506.4 million.

The second highest source of multilateral financing is ADB with an assistance of $14.8 million in March and $390.9 million in July-March FY19 period.

Another significant source of assistance in February was IDA with a disbursement of $23 million, and cumulative disbursement of $165.9 million.

Similarly, other multilateral lenders like AIIB, IBRD and IFAD etc. also provided necessary budgetary and project-related support to Pakistan.

The total disbursement from multilateral sources in ongoing fiscal year so far, has been recorded at $1.1 billion, which is about 34% of the budget estimate of $3.4 billion for the whole year.

Coming to bilateral foreign loans, the government of China and its financial institutions provided $1.25 billion or 81% of the total bilateral loans received during the first 9 months of the current fiscal year. This amount was about 96% of the budget estimate of $ 1.3 billion for bilateral loans.

 In addition to this, in the month of March China disbursed around $47.4 million.

Overall, Pakistan has collectively received a sum of $1.5 billion as bilateral loans, which largely exceeds the budget estimate by $232 million. These high external financing will increase the external debt a great deal which is a risky strategy.

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