By Staff Reporter
ISLAMABAD: Pakistan’s foreign assistance inflows surged more than 25% in the first half of the fiscal year, driven largely by stepped-up program support from the International Monetary Fund, providing a crucial buffer for the cash-strapped South Asian economy amid ongoing balance-of-payments pressures.
Total inflows, excluding IMF disbursements, climbed to $4.507 billion in the six months through December, up from $3.603 billion a year earlier, according to data released by the Ministry of Economic Affairs. That marked a 25% increase, with December alone bringing in $1.475 billion — a 59% jump from the $930 million recorded in the same month last year and far exceeding the $511 million in November and $471 million in October.
The figures don’t include a separate $1.2 billion tranche from the IMF disbursed earlier this month, which pushes the cumulative total for the period to $5.7 billion. Foreign loans accounted for the bulk of the inflows, soaring 66% to $4.445 billion from $2.673 billion a year ago, while grants slipped 37% to $62.5 million from $99 million. The uptick comes as Pakistan grapples with a substantial external financing gap, with the government targeting $19.9 billion in total foreign inflows for the full fiscal year ending in June — slightly higher than the $19.4 billion secured last year.
Officials have leaned heavily on multilateral and bilateral lenders to plug budget shortfalls, though progress has been uneven. Of the $4.507 billion received in the first half, $1.726 billion went toward project financing, while $2.781 billion covered non-project needs, the ministry said. Budget support loans totaled $1.628 billion over the period, even as the annual target for such financing was trimmed to $13.5 billion from $15 billion last year.
Pakistan also drew down $600 million from the Saudi oil facility in the first six months, aligning with the monthly pace of $100 million against a full-year goal of $1 billion. That arrangement, part of broader support from Gulf allies, has helped ease energy import costs. Multilateral inflows, excluding the IMF, edged up to $1.967 billion from $1.864 billion a year earlier, though that fell short of half the $5 billion annual target — compared with last year’s $4.5 billion goal.
Bilateral inflows from lenders outside Pakistan’s three key strategic partners jumped 235% to $1.072 billion from $312 million, putting the country on track toward its $1.36 billion yearly objective, well above last year’s $523 million target. Combined, bilateral and multilateral sources delivered $3.04 billion in the first half, against a full-year aim of $6.4 billion. That’s an improvement over last year’s $2.172 billion from those channels, which missed the $5.05 billion mark.
Among multilaterals, the World Bank led with $802 million in disbursements, a 63% increase from $492 million last year. The Asian Development Bank followed with $609 million, up from $373 million — though it slipped to second place. The Islamic Development Bank ramped up support to $535 million, a 234% rise, with $484 million in short-term credit offsetting a dip in commercial bank loans from abroad.
Separately, inflows from overseas Pakistanis via Naya Pakistan Certificates rose to $1.2 billion, from $928 million a year ago, bolstering foreign exchange reserves. The inflows provide some breathing room for Prime Minister Shehbaz Sharif’s administration, which has navigated IMF-mandated reforms, including subsidy cuts and tax hikes to unlock bailout funds.
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