External financing plummets 78 percent in July-August amid economic crunch

By Staff Reporter

ISLAMABAD: Pakistan’s external financing dropped 78 percent to $714.74 million in the first two months of the fiscal year, down from $3.206 billion a year earlier, as the nation struggles to stabilize its economy.

The South Asian country, which is relying on International Monetary Fund support, had budgeted $19.393 billion from multiple financing sources for the fiscal year, including $19.216 billion in loans and $176.29 million in grants.

Multilateral lenders provided $292.99 million, while bilateral sources contributed $162.70 million, according to data from the Economic Affairs Division. The “Naya Pakistan Certificate” scheme attracted $259.04 million, including $131.35 million in August.

The Asian Development Bank (ADB) disbursed $96.20 million, short of its budgeted $1.651 billion for the fiscal year. The International Development Association (IDA) provided $147.86 million, against a budgeted $1.525 billion, while the International Bank for Reconstruction and Development (IBRD) disbursed $28.88 million, compared to a budgeted $550.22 million.

China’s disbursement of $96.76 million in July was followed by no funding in August, despite a budgeted $134.18 million for the fiscal year. Saudi Arabia provided $2.69 million in July, with no subsequent disbursement, against a budgeted $146.54 million.

Pakistan’s reliance on external financing has increased amid a decline in foreign exchange reserves and a widening current account deficit. The nation’s budgeted estimates include $9 billion in time deposits from Saudi Arabia and China and $3.779 billion from foreign commercial banks, but no funds were received under these heads in the first two months.

Non-project aid totaled $273.12 million, including $14.07 million for budgetary support, while project aid reached $441.62 million. The Islamic Development Bank’s (IsDB) short-term facility did not disburse any funds, despite a budgeted $500 million, while the Asian Infrastructure Investment Bank (AIIB) and International Fund for Agricultural Development (IFAD) provided $8.73 million and $9.59 million, respectively.