PM Shehbaz's govt borrows $1.72bn in foreign loans in four months

• Pakistan receives $259m from bilateral creditors.
• Multilateral creditors disburse $721m to Islamabad.
• $19.39bn foreign loans of projected in current fiscal year.
  

ISLAMABAD: In its bid to tackle various challenges faced by the cash-strapped country on the economic front, Prime Minister Shehbaz Sharif-led incumbent government has secured $1.72 billion in foreign loans from multilateral and bilateral creditors during the first four months (July-October) of the current fiscal year, The News reported on Wednesday.

The government's borrowing figures come despite the absence of international bond issuances or deposit rollovers so far.

Islamabad, after strenuous efforts, had succeeded in securing the approval of the International Monetary Fund (IMF) Executive Board for the $7 billion Extended Fund Facility (EFF) in September.

The aforesaid loan stats are other than the IMF's $1 billion tranche, which if included, would push the total foreign loans for the period amount to $2.72 billion.

However, the Economic Affairs Division (EAD) did not show the IMF loan in its data, as it supports the balance of payments (BoP) and is recorded on the State Bank of Pakistan's balance sheet. By comparison, Pakistan received $4.25 billion in foreign loans during the same period last fiscal year (2023–24).

For the current fiscal year, Islamabad has projected $19.39 billion in foreign loans from multilateral and bilateral creditors.

This includes $9 billion in foreign deposits — $5 billion from Saudi Arabia and $4 billion from China — as well as $1 billion from an international bond issuance.

According to data from the EAD, Pakistan received $259 million from bilateral creditors during the first four months of the fiscal year.

Key contributions include China ($97.58 million), France ($89.64 million), Germany ($11.29 million), Japan ($9.71 million), Korea ($7.59 million), Saudi Arabia ($6.35 million) and the US ($37.32 million).

Multilateral creditors disbursed $721 million during the same period.

Significant contributors include the Asian Development Bank ($173.05 million), the Asian Infrastructure Investment Bank ($17.41 million), the World Bank ($266.64 million) under IDA (concessional loans) and $97.19 million under IBRD, Islamic Development Bank's $100 million (short-term loan) and $50.41 million, IFAD $15.56 million, OPEC Fund $0.75 million.

In addition, the government secured $200 million through commercial loans and $547 million through the Naya Pakistan Certificates during the first four months of the current fiscal year.