Islamabad [Pakistan], December 24 : The foreign loan disbursements to Pakistan have dropped by 43 per cent, reaching USD 3.6 billion in the first five months of the current fiscal year, The Express Tribune reported on Tuesday, citing official data released on Monday.
This is a significant decrease from the USD 6.4 billion received in the same period last year.
The Ministry of Economic Affairs of Pakistan and the State Bank of Pakistan reported that out of the total USD 3.6 billion, less than USD 2.6 billion came from bilateral and multilateral lenders, excluding the IMF's first loan tranche, and with the IMF loan added, the total disbursement was still USD 2.8 billion lower than the previous year's figure, as reported by The Express Tribune.
During the last fiscal year, Saudi Arabia provided USD 2 billion in additional cash deposits, and the UAE disbursed USD 1 billion. For the current fiscal year, the government and the central bank are expecting a total of USD 24 billion from fresh loans and the rollover of existing debts, including USD 5 billion in Saudi deposits and USD 4 billion in Chinese deposits.
Pakistan faces challenges in repaying USD 12.7 billion in maturing cash deposits and USD 3.8 billion in Chinese commercial loans this year. With a low credit rating and slow-moving projects, the country is struggling to meet its external financing needs, despite expectations that the IMF program would unlock additional funds, The Express Tribune reported.
The disbursements from July to November represent just 15 per cent of the annual target, with most rollovers expected to occur later in the fiscal year. Saudi Arabia extended the repayment of a USD 3 billion debt for one year, and the Ministry of Economic Affairs will officially report this next month, The Express Tribune reported.
The World Bank, once a major loan provider, has declined to offer new budget support loans to Pakistan this fiscal year, and project funding has been progressing slowly. The country has also budgeted USD 24 billion in borrowing, including USD 19.2 billion in the budget, but the USD 3 billion rollover from the UAE and IMF repayments are not included in the federal accounts.
From July to November, multilateral creditors provided USD 1.4 billion, representing 32 per cent of the annual target, a significant increase from the previous year, primarily due to a USD 500 million loan from the Asian Development Bank (ADB) for disaster resilience projects. The ADB's total disbursement in these five months was USD 764 million, nearly 50 per cent more than the previous fiscal year.
The World Bank released USD 398 million, down 16 per cent from last year, while the Islamic Development Bank contributed USD 210 million. Pakistan's plans to raise USD 1 billion through sovereign bonds have also not progressed, and while the government had budgeted USD 3.8 billion in commercial loans, only USD 200 million has been received, primarily through a rollover by China, the Express Tribune reported, citing the finance ministry's statement to the Senate Standing Committee on Finance.
Bilateral creditors, including China and France, disbursed a total of USD 202 million, a 63 per cent decrease compared to the previous year.
Disclaimer: This post has been auto-published from an agency feed without any modifications to the text and has not been reviewed by an editor