ISLAMABAD: The PTI government has obtained $4.6 billion worth foreign loans during the first five months of the ongoing financial year (July-November 2021). Since the formation of PTI government in 2018, total foreign loans inflows amounted to $40 billion.
According to Ministry of Economic Affairs latest report, Pakistan has received about $4.699 billion inflows, including $4.575 billion in loans and about $123 million in grants. The government has a budgetary target to obtain about $14.1 billion in foreign loans and grants during the current fiscal year.
The total loans in five months included $2.93 billion for programme or budgetary support and $1.17 billion for projects. Of this, multilateral lenders like the Asian Development Bank, World Bank, Islamic Development Bank, Asian Infrastructure Investment Bank (AIIB) and others disbursed a total of about $2 billion during the first five months of the current fiscal year.
Commercial banks, including Ajman Bank, Dubai Bank, Standard Chartered Bank and Suisse AG, UBL and ABL, disbursed about $1.53 billion. Bilateral lenders like China, the United Kingdom, the United States, Japan, France, Germany and Korea provided $1.041 billion to Pakistan.
A few days back, the MEA had reported that total disbursements of foreign assistance during FY2020-21 amounted to $13.547 billion, about 27pc higher than $10.7 billion in FY2019-20. Disbursements in FY2018-19 had amounted to $10.82 billion, taking the three-year total disbursements to $35.1 billion. With $4.575 billion inflows during the five months of the current fiscal year, total disbursements since July 2018 have reached about $39.65 billion.
Total disbursements from multilateral lenders during FY2020-21 ending June 30, 2021, stood at $4.373 billion or 33 per cent of total disbursements, led by the ADB at about $1.37 billion. An amount of $454 million or 3pc of the total disbursements came from bilateral development partners, particularly China, France, the US and the UK, and $4.72bn or 35pc from foreign commercial banks.
About 49pc of total external government debt of $85.6 billion by the end of June 2021 came from multilateral lenders, including the IMF, followed by 25pc bilateral external debt and 11pc foreign commercial banks. The remaining 15pc of the external public debt consisted of SAFE deposit and Eurobonds (inclusive of Sukuk).
As of June 30, 2021, 70pc of total external public debt consisted of loans on fixed interest rates, while 30pc on floating interest rates. During the year, the government also paid $9.39 billion on account of servicing of external public debt, including $6.94 billion in principal and $1.45 billion in interest payments.
According to Ministry of Economic Affairs, the government contracted $15.32 billion worth of new foreign loans from multilateral institutions and commercial banks during fiscal year 2020-21, almost 47pc higher than $10.45 billion a year earlier.
With these additional loan agreements, the PTI government contracted a total of about $34 billion in its first three years in power, according to ‘Annual Report on Foreign Economic Assistance 2020-21’ released by the Ministry of Economic Affairs. Total disbursements of foreign loans in three years stood relatively higher at $35.1 billion in three years.
The report noted that out of $15.32 billion new agreements, $6.97 billion worth of financing agreements were signed with multilateral development partners, $4.66 billion with foreign commercial banks and $187m with bilateral development partners. In addition, the government also borrowed $2.5 billion from international capital markets through Eurobonds and $1bn from State Administration of Foreign Exchange (SAFE) Authority, China, as deposit.
