ISLAMABAD: As the government resumed commercial borrowing, foreign economic assistance (FEA) inflows to Pakistan rose nearly a quarter to $1.7 billion during July-August 2026-27.
Total inflows (excluding the International Monetary Fund), both loans and grants, in the 2MFY27 amounted to $1.703bn, up from $1.377bn in the comparable period last year, an increase of 24pc.
Inflows in August alone amounted to $940m, up 38pc from $680m in the same month last year. Total inflows in July amounted to $764m, up from $697m a year ago, according to data reported by the Ministry of Economic Affairs (MEA).
The major increase came from a $300m inflow in the form of a commercial loan from United Bank Dubai and about $265m more in Naya Pakistan Certificates (NPCs) from overseas Pakistanis.
There were no commercial loans in the first two months of FY26, as commercial banks had been staying away from Pakistan for a couple of years amid economic challenges and a poor credit rating.
Investments from overseas Pakistanis in Naya Pakistan also jumped by almost 73pc to $630m in two months this year compared to $365m in the same period last year. This included $182m inflows in conventional NPCs and $448m in Islamic NPCs. This is the first time the Ministry of Economic Affairs has started reporting conventional and Islamic NPCs separately.
Meanwhile, total inflows from multilateral and bilateral lenders dropped 43.24pc to $626m from $1.103bn last year. The fall was especially visible from bilateral sources, as total inflows plunged 85pc to just $35m from $232m last year. Foreign assistance from multilateral sources also declined 24pc to $591m in 2MFY27 from $781m last year.
The government has a budgetary target of about $24bn in FEA for 2026-27, up from $20bn in 2025-26. The government materialised slightly over $16bn in FY26, according to MEA.
The MEA said on Tuesday that of the total $1.7bn inflows in July-August, $485m was received for project financing, while non-project inflows amounted to $1.22bn. This meant about $258m in loans were received in two months for budget support.
United Bank Dubai stood out as the single largest lender with $300m, followed by the World Bank with $286m and then Islamic Development Bank with $191m. China came in at fourth position among all lenders and the single largest bilateral with $146m assistance followed by ADB’s $97m.
Published in Dawn, September 23rd, 2026
