ISLAMABAD: Amid external account challenges, Pakistan borrowed more than $15.5bn in foreign loans in the first 10 months of the current fiscal year, about 70pc more than borrowing from foreign sources in the same period last year.

In its monthly report on foreign economic assistance, the Ministry of Economic Affairs said it received about $13.03bn foreign assistance in 10MFY2022.

The ministry’s monthly report on foreign inflows showed that the government crossed almost 92.5pc of the $14.09bn target for foreign assistance set for the whole fiscal.

This does not include more than $1.5bn of expensive foreign debt in Naya Pakistan Certificates from overseas Pakistanis or the over $1bn secured from the International Monetary Fund, which arrived in February. Both these loans are reported separately by the State Bank of Pakistan.

As a result, the total foreign debt from external sources since 2018 has reached $51.03bn. The total foreign loans jumped to $55.13bn when slightly more than $4.5bn in IMF funds were also taken into account during the same period.

The data showed that the size of foreign loans had been steadily increasing over the last three and half years; from $10.59bn in FY2018-19 to $10.662bn in FY2019-20 and then reaching $14.28bn in FY2020-21 followed by $13.03bn in the first 10 months of the current fiscal year.

While the annual budget target for foreign debt in 2021-22 was set at $14.088bn, the government borrowed ended up $13.03bn in the first 10 months alone.

There were four major sources of foreign inflows, including $4.05bn from multilateral lenders, followed by $3bn of time deposit from Saudi Arabia, about $2.623bn in commercial loans from private banks and $2.041bn worth of international bonds.

The largest among the bilateral loans came from Saudi Arabia at $201 million, followed by China at $153 million and $64 million from the United States. Total loans from bilateral lenders stood at $486 million in 10 months.

Published in Dawn, May 24th, 2022