In the first month of the current fiscal year 2022-23, the government obtained $185.61 million in external loans, primarily due the absence of International Monetary Fund (IMF) loan programme that dried up almost all the inflows from bilateral and multilateral sources.
The sources would release the loans once the global lender approves loan for Pakistan on August 29 this year. The executive board will convene on Monday to approve a much-awaited $1.17 billion loan for Pakistan. Revival of the IMF programme would not only add to the country’s foreign exchange reserves, but also create way for securing loans from other international financial institutions and friendly countries.
The country received $78.04 million from multilaterals and $107.56 million from bilateral in July 2022, totaling overall monthly borrowing to $185.61 million. The breakup of $107.56 million received from bilateral sources showed that Saudi Arabia had provided oil on defer payment facility worth of $100 million in July as against annual projection of $800 million.
United States has disbursed $6.01 million and France $1.55 million. In multilateral sources, IDA of the World Bank disbursed $59.14 million, Asian Development Bank (ADB) $7.36 million and International Bank for Reconstruction and Development (IBRD) $6.56 million in the month of July, according to the data of the ministry of Economic Affairs.
Read more: IMF programme followed by $1.5 billion disbursement from the ADB
The government has budgeted foreign assistance of $22.8 billion for the current fiscal year including $7.5 billion foreign commercial banks, $22.655 billion loans, and $161.46 million grants.
In the meantime, the country would generate $2 billion from bonds issuance in international market and $3 billion from the IMF. Similarly, it would borrow $7.5 billion from the commercial banks and $1.63 billion from the Naya Pakistan Certificate.
Apart from $22.817 billion, Pakistan has secured financing worth $4 billion from friendly countries which was a precondition for revival of the stalled IMF’s programme. The country would receive $2 billion from Qatar, $1 billion in oil financing from Saudi Arabia and a similar amount in investments from the United Arab Emirates (UAE).
China disbursed no amount in July, although, the government has budgeted estimates of $49.02 million for the current fiscal year.
During last fiscal year, the government had borrowed Rs2.859 trillion as gross external financing. Notably, it had repaid Rs1.681 trillion in the same period year.
Therefore, net external financing was Rs1.178 trillion in the previous financial year. Project aid was Rs347.9 billion, programme loans were Rs739.4 billion, other loans were Rs1.715 trillion, grants Rs41.048 billion and project loans & grants outside PSDP (Public Sector Development Programme) were Rs15 billion in the last fiscal year.
It is pertinent to mention that country’s total debt and liabilities had skyrocketed to Rs59.7 trillion by end-June 2022, according to the SBP.