ISLAMABAD: Pakistan authorities have materialised only $12.5 billion in foreign loans in the first nine months of 2024-25 against an annual $19.2bn target by June 30.

While half of this portfolio was legacy rollovers from China, Saudi Arabia and the United Arab Emirates — fresh loans and grant inflows amounted to $5.51bn in nine months, almost 20pc lower than the comparable period of last fiscal year.

In its monthly report on Foreign Economic Assistance (FEA) released on Monday, the Economic Affairs Division (EAD) said that against its annual target of $19.4bn, total FEA in July-March amounted to $5.51bn compared to $6.9bn in the same period last year with the annual target of $17.6bn.

This does not include about $1bn disbursed by the IMF in October as upfront payment under the $7bn ongoing Extended Fund Facility (EFF) that is accounted for separately by the State Bank of Pakistan (SBP). However, $1.2bn received a year back under the Stand-By Arrangement (SBA) had also seen similar accounting treatment.

Expected inflow of $9bn from Saudi Arabia and China critical to meet external funding gap in FY25

With three rollovers and fresh disbursements, the total external assistance in nine months amounted to $12.46bn. This included $3bn rollovers by Saudi Arabia, $2bn by UAE and $1bn by China. This does not include another $2bn China rolled over last month, making its total rollover to $3bn thus far. Pakistan has a total annual rollover portfolio of about $12.7bn in safe deposits and loans from these three countries, leaving the country’s net international reserves (NIR) at a deficit.

The foreign economic assistance recorded by the EAD showed inflows fell by about 20.2pc to about $5.5bn in July-March, apparently because of delayed IMF bailout and subsequent $1bn disbursements. Last year, these inflows amounted to $7.9bn in these nine months, including IMF.

In March this year, the EAD reported monthly inflows at $555 million, compared to $365m in February and $830m in January.

The EAD said that out of $5.5b, about $3bn was received for budgetary support or programme loans and the remaining $2.4bn for project financing. During the same period last year, EAD secured about $2.2bn as project aid and $4.7bn as programme loans.

Of the total, inflows from multilaterals stood at $2.83bn in 9MFY25 compared to $2.7bn last year, while bilateral disbursements stood at $358.5m against $870m last year.

The EAD reported to have received about $504m in loans from foreign commercial lenders (UAE-based) in nine months of the current year, showing a minor recovery from commercial banks who had stayed away from financing Pakistan last year. It may be noted that the government has budgeted $3.8bn in financing from foreign commercial banks for the current year, showing a poor start, again due to the delayed IMF umbrella.

The government has also targeted $1bn in international bonds for the current year. A projection for $9bn inflow from China and Saudi Arabia was targeted for FY25. These projections include a $5bn time deposit from Saudi Arabia and $4bn China’s SAFE deposit. These projections are critical for Pakistan to meet its external financing gap as part of the IMF programme.

In addition, Pakistan also received $1.455bn from overseas Pakistanis through Naya Pakistan Certificates compared to $781m in the same period last year.

The Asian Development Bank disbursed $1.189bn in 9MFY25 compared to $665m a year ago, and $979m was received from the World Bank.

Published in Dawn, April 22nd, 2025