Foreign loan disbursements dropped 43% to $3.6 billion in the first five months of the current fiscal year due to slower-than-expected releases, showed the official statistics.
Against loans of $6.4 billion received during the July-November period of last fiscal year, Pakistan got $3.6 billion from bilateral and multilateral creditors during this fiscal year, according to figures reported by the Ministry of Economic Affairs and the State Bank of Pakistan.
The ministry reported that during the first five months of 2024-25, the bilateral and multilateral lenders disbursed less than $2.6 billion, excluding the IMF’s first loan tranche.After adding the IMF installment, the disbursement reached $3.6 billion, which was $2.8 billion less than the comparative period of last year.
In the last fiscal year, Saudi Arabia gave $2 billion in additional cash deposit while the United Arab Emirates (UAE) disbursed $1 billion worth of new loan.
For the current fiscal year, the federal government and the central bank have estimated inflows of $24 billion in the shape of fresh borrowing and rollovers of existing loans. The rollover of $5 billion worth of Saudi cash deposits and $4 billion worth of Chinese cash deposits is also part of the government’s plan.
Pakistan is dependent on foreign loan disbursements and rollovers. The country finds it difficult to pay back $12.7 billion of cash deposits maturing this year and $3.8 billion of Chinese commercial loans. The cumulative maturities of $16.5 billion are higher by $4.5 billion compared to the gross official foreign exchange reserves of Pakistan.
The IMF programme had been expected to unblock other financing lines but due to the low credit rating of Pakistan, coupled with slow movement of different projects, the country is struggling to meet its external financing needs.
The disbursements during the July-November FY25 period were equal to 15% of the annual estimate. One of the reasons for the low disbursements was that the majority of rollovers fall in the December-June period.
Saudi Arabia this month extended the repayment of $3 billion debt for one year, which the Ministry of Economic Affairs will officially report next month. The government and the central bank separately report the loan release data of the IMF and other bilateral and multilateral creditors.
