ISLAMABAD: In the initial half of fiscal year 2024 (1HFY24), Pakistan has successfully secured $5.968 billion in external financing, aligning with the annual budget projection of $17.62 billion. The Economic Affairs Division’s latest monthly update revealed a substantial influx in December, totaling $1.621 billion, comprised of $1.609 billion in loans and $12.16 million in grants from various sources.
Breaking down the financing, the government obtained a $517.8 million loan for non-project aid in December. This includes $172.83 million for program/budgetary support assistance to restructure Pakistan’s economy, $249.38 million by DPC, and the remaining $95.18 million for the SFD oil facility.
The report highlights that disbursements from bilateral and multilateral development partners remained robust, reaching $1.537 billion in December and $2.968 billion in the first six months of FY24, significantly contributing to improved foreign exchange reserves.
The Ministry of Economic Affairs emphasized the country’s reliance on foreign commercial borrowing, with $83.96 million obtained through the Naya Pakistan Certificate in December 2023.
In terms of foreign assistance from multilateral sources, Pakistan received nearly $1.398 billion in December and $2.245 billion in 6MFY24. Leading contributors in December included the International Development Association-World Bank (IDA) with $638.1 million, followed by the Asian Development Bank (ADB) with $468.96 million, the Asian Infrastructure Investment Bank (AIIB) with $254.6 million, the International Bank for Reconstruction and Development (IBRD) with $29.33 million, and the International Fund for Agricultural Development (IFAD) with $7.83 million.
Cumulatively, IDA emerged as the major contributor to multilateral lending, with total disbursements amounting to $1.04 billion, followed by ADB with $589.43 million and AIIB with $287.04 million.
Bilateral development partners also played a crucial role, providing $138.72 million in December and $723.13 million in 6MFY24. Notably, Saudi Arabia (Oil Facility) contributed $95.18 million, followed by China with $33.92 million, Germany with $7.63 million, and the USA with $1.74 million during the month under review.
In the first six months of FY24, Saudi Arabia (Oil Facility) held the majority proportion, with disbursements reaching $595.18 million.
This positive trend in external financing underscores the international community’s confidence in Pakistan’s economic stability and growth prospects. The inflow of funds is expected to further support the country’s economic development initiatives and enhance its foreign exchange reserves.
