Pakistan borrowed $4.5 billion from multiple financing sources in the first five months (July-November) of 2020-21 projected at 36 percent of total budgeted external loans of $12.233 billion for the entire fiscal year 2020-21.
Economic Affairs Division data released on Thursday shows that in November the country received $1.4 billion external inflows from multiple financing sources including $1.054 billion from foreign commercial banks. The external inflows during the corresponding period (July-November) of the fiscal year 2019-20 were $3.1 billion which was around 24 percent of the annual budgeted amount of $12.958 billion.
In the aftermath of Covid-19 and its second wave in the country the disbursements of project financing from development partners dried up during the last quarter of the fiscal year 2019-20.
The pandemic led to the closure of many economic activities across the country including development project activities. However, after the ease in the lockdown by the government the economic activity is reviving which may lead to a revival of the project financing in the current fiscal year 2020-21, EAD added.
The total receipt of $4.499 billion constitutes $1.300 billion or 29 percent as program/budgetary support assistance; $1.621 billion (36 percent) as foreign commercial borrowing; and $518 million (12 percent) as project assistance to finance its development projects activities for improving the socio-economic development of the country and for asset creation, and $60 million (01 percent) as short term credit while $1 billion (22 percent) received in terms of time safe deposits.
According to the data the government procured $1.62 billion loans from foreign commercial banks during July-November 2020, including $34.62 million from Ajman Bank, $200 million from Standard Chartered Bank (London), $216.66 million from Dubai Bank, again $185 million from Dubai Bank in November, $115 million were received from the consortium-led by Suisse AG, UBL and ABL, $270 million from Emirates NBD in November and $500 million from ICBC China in November. The data also reflects the $1 billion of safe China deposit.
The bilateral and multilateral development partners have disbursed $1.878 billion of foreign economic assistance during July-November of the ongoing fiscal year 2020-21 against the budgetary allocation of $5.811 billion for the fiscal year 2020-21.
Amongst the multilateral development partners, mainly Asian Development Bank provided $712 million, World Bank disbursed $694 million against the budgetary allocation of $2,257 million. While from bilateral sources, France, the USA, and China provided $33.4 million,$63.8 million & $21.8 million respectively.
According to EAD data during July-October, 2020 total servicing of external public debt was $2.450 billion against the annual repayment estimates of $10.363 billion for the entire fiscal year.
For the period July- October 2020-21, net transfers to the government were $144 million. Positive net transfers came mainly due to higher inflows from multilateral Development Partners.
According to EAD, the stock of external loans that was obtained on market-based instruments has decreased by $ 618 million and the share of concessional external loans with longer maturity increased by $761 million.
Islami jamhuria?
What a Riasat. Living on loans from foreign donors at fixed interest rates.