Pakistan gets foreign loans of $22.5 billion in last fiscal

By Staff Reporter

ISLAMABAD: Pakistan borrowed $22.5 billion in the last fiscal year to plug the current account deficit and to pay back maturing debts.

The country has also secured $2.24 billion expansive commercial loans in June 2022 to support depletion of foreign currency reserves after a deadlock on bailout programme with the IMF that blocked two tranches from the Fund and slowed down budgetary/policy loans from the multilateral creditors.

“The government had to rely mostly on commercial loans, bilateral deposits, issuance of international bonds and guaranteed loans to fill the ballooning financing gap,” an official said.

Foreign debt repayments and cash dollar for oil import however ate up foreign to below $10 billion by June 30, 2022. As of July 15, 2022, the foreign exchange reserves further declined to $9.3 billion.
Saudi Arabia with over $400 million, was the largest lender in the last fiscal year.

The Economic Affairs Division (EAD) data showed that the government received total loans and grants of $17 billion ($16.98 billion exactly) in the last fiscal year of 2021-against $14.2 billion received in the previous fiscal year 2020-21.

State Bank of Pakistan (SBP) data, however, showed the central bank had received $4.606 billion in Roshan Digital Accounts out of which $2.9 billion were received Naya Pakistan Certificate till June 22, 2022. Pakistan also received a $1 billion tranche from the IMF after completion of the 6th review under the $6 billion Extended Fund Facility (EFF) in February 2022.

The EAD data showed that Islamabad received $4.8 billion from multilateral creditors during the last fiscal year out of which the Asian Development Bank (ADB) disbursed a loan of $1.62 billion. The Asian Infrastructure Investment Bank (AIIB) disbursed $41.6 million, E.C.O T/Bank $52.3 million, European Union (EU) $22.55 million, World Bank’s IBRD $259.6 million, WB’s IDA $1.32 billion, Islamic Development Bank (IDB) $78 million, Islamic Development Bank (short-term) $1.327 billion, IFAD $43.13 million, Japan $0.55 million, MDTF $6.1 million and OFID $50 million.

The bilateral donors provided $708 million to Pakistan in the last fiscal year as China disbursed $162.6 million, France $15.5 million, Germany $16.68 million, Japan $20 million, Korea $5.51 million, Kuwait $0.11 million, Oman $0.75 million, Saudi Arabia $401.09 million, UK $16.01 million and USA $69.82 million.

The multilateral and bilateral creditors had provided $5.536 billion during the last financial year 2021-22.
The government generated $2.04 billion through the launching of international bonds in the last fiscal year.

Through commercial loans, the government raised $4.863 billion in the last fiscal year out of which $2.24 billion were generated alone in June 2022.

The government received time deposits of $3 billion in the current fiscal year from Saudi Arabia. The government also generated $1.532 billion in shape of guaranteed loans in the last financial year.