ISLAMABAD – According to latest data from the Economic Affairs Division (EAD), Pakistan borrowed $5.968 billion from various funding sources during the first six months (July-December) of the current fiscal year 2023-24, compared to $5.595 billion in the same period last fiscal year.
The data shows Pakistan received $1.621 billion in foreign loans in December 2023 alone, a significant increase from $478.05 million received in December 2022.
However, the EAD figures do not include the $1.2 billion received from the IMF in July 2023 as the first tranche of the $3 billion Stand-By Arrangement. The $1 billion loan from the UAE is also not accounted for. Including these amounts, Pakistan’s total foreign inflows during July-December FY24 would stand at $8.168 billion.
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The largest inflow was the $2 billion deposited by Saudi Arabia in July 2023 as part of the time deposit facility. No funds were received from foreign commercial banks during July-December despite a budgetary allocation of $4.5 billion for FY24.
Key sources of loans during the first half of FY24 included $589 million from ADB against a full year allocation of $2.086 billion, $595 million from Saudi Arabia’s oil facility, and $1.04 billion from the World Bank. China remained the largest bilateral lender with $508 million disbursed for the JF-17 fighter jets project.
The high dependence on foreign loans highlights Pakistan’s challenging economic situation and the importance of finalizing the IMF program to restore confidence. The government faces the difficult task of rationalizing expenditures while boosting revenues to reduce the need for external borrowing.
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