ISLAMABAD: Pakistan’s foreign assistance inflows rose by about 58 per cent in the first quarter of the current fiscal year.
In its monthly report on Foreign Economic Assistance (FEA), the Economic Affairs Division (EAD) on Monday said against its annual target of $17.6bn, total FEA in the July-September quarter amounted to $3.527bn when compared to just $2.234bn of the same period last year, an increase of 58pc. Total inflows recorded by the EAD in September came in at $321 million against $316m in August.
Major FEA during the first quarter flowed in at $2.89bn in July soon after Pakistan reached an agreement with the International Monetary Fund (IMF) for a fresh short-term programme.
This FEA is in addition to $1.2bn released by the IMF on July 13 as the first tranche of the $3bn Stand-By Arrangement (SBA) and $1bn by the United Arab Emirates that are separately accounted for by the State Bank of Pakistan (SBP).
The bulk — $2bn — of foreign loans reported by the EAD came from Saudi Arabia as a time deposit followed by a $508m guaranteed loan to Pakistan Air Force (PAF) by China National Aero-Technology Import & Export Corporation (CATIC). Of the remaining inflows included $490.48m from multilateral agencies and $324m from bilateral lenders. Another $204.5m flowed in from overseas Pakistanis in Naya Pakistan Certificates (NPCs).
The government has estimated about $17.62bn in foreign assistance in the budget for the current fiscal year, including $17.385bn in loans and the remaining $235m in grants. As such, total loan disbursements in the first three months stood at $3.49bn and $34m in grants.
The EAD said that out of $3.527bn, the bulk of $2.65bn was received for budgetary support or programme loans and about $874m as project aid.
During the last fiscal year, the government had budgeted $22.8bn foreign assistance in FY23 but could materialise only $10.8bn throughout the year — about 46pc of the target — because of the suspension of the IMF programme, leaving a $11.8bn slippage, resulting in depletion of foreign exchange reserves.
Mainly because of this, the country’s total external public debt slightly declined to $85.2bn as of March 31 from $86.56bn as of Dec 31, 2022, according to the EAD’s quarterly report for the third quarter of last fiscal year ending March 31.
Out of the total external public debt of $85.18bn, the government owed $64bn to multilateral and bilateral development partners including IMF which meant more than two-thirds (i.e. 75pc) of the total external public debt was on concessional terms with a longer maturity, 16pc (i.e. $13.5bn) from international capital markets and foreign commercial banks, and 7pc (i.e. $7bn) of the total external public debt constitutes deposits from friendly countries like China and Saudi Arabia.
Published in Dawn, October 17th, 2023
