ISLAMABAD: Pakistan has received almost $12bn foreign loans in the first eight months (July-February) of 2024-25, aiming to cross the $19.2bn target by June 30.
While half of this portfolio was legacy rollovers from China, Saudi Arabia, and the United Arab Emirates, fresh loans and grant inflows amounted to $5.95bn in eight months, almost 25pc lower than the comparable period of last fiscal year.
In its monthly report on Foreign Economic Assistance (FEA) released on Wednesday, the Economic Affairs Division (EAD) said that against its annual target of $19.4bn (including grants), total FEA in 8MFY25 amounted to $4.953bn when compared to $6.678bn in the same period last year with the annual target of $17.6bn.
This does not include about $1bn disbursed by the IMF in October 2024 as an upfront payment under the $7bn ongoing EFF that is accounted for separately by the State Bank of Pakistan. However, $1.2 billion was received a year back under the Standby Arrangement (SBA), which had also seen similar accounting treatment.
Pakistan receives $5.95bn in July-Feb FY25
With three rollovers and fresh disbursements, the total external assistance in eight months amounted to $11.95bn. This included $3bn rollovers by Saudi Arabia, $2bn by UAE and $1bn by China. This does not include another $2bn China rolled over earlier this month, making its total rollovers to $3bn thus far. Pakistan has a total annual rollover portfolio of about $12.7bn in safe deposits and loans from these three countries, leaving the country’s net international reserves (NIR) at a substantial deficit.
The FEA recorded by the Economic Affairs Division showed inflows fell by about 26pc to about $4.95bn in July-February FY25, apparently because of delayed IMF bailout and subsequent $1bn disbursements. Last year, inflows amounted to $7.88bn in the same period, including inflows from the IMF.
In February, the EAD reported inflows at $365m compared to $830m in January.
The EAD said that out of $4.95bn, about $2.74bn was received for budgetary support or programme loans and the remaining $2.2bn for project financing. During the same period last year, EAD secured about $5.14bn as project aid and $1.8bn in project loans.
Of the total, inflows from multilaterals stood at $2.49bn in 8MFY25 compared to $3.8bn a year ago, while bilateral disbursements stood at $334m against $949m.
The EAD reported receiving about $500m from foreign commercial lenders (UAE-based) in 8MFY25, showing a minor recovery from commercial banks that had stayed away from financing Pakistan last year. It may be noted that the government has budgeted $3.8bn from foreign commercial banks for the current year, showing a poor start, again due to the delayed IMF umbrella.
The government has projected $1bn from international bonds and $9bn inflows from bilateral partners — China and Saudi Arabia — for the current fiscal year. These projections include $5bn time deposit from the Kingdom of Saudi Arabia and $4bn China’s SAFE deposit. These projections are critical for Pakistan to meet its external financing gap as part of the IMF programme.
In addition, Pakistan also received $1.3bn from overseas Pakistanis through Naya Pakistan Certificates compared to $590m. The Asian Development Bank led the multilaterals with $1.098bn disbursement compared to its $1.93bn in 8MFY24. The World Bank provided $849m in eight months.
