ISLAMABAD: In the first quarter of fiscal year 2023-24 (FY24), Pakistan actively obtained foreign loans totaling $3.527 billion, marking a substantial increase from the $2.234 billion borrowed during the corresponding period in FY23.
Data released by the Economic Affairs Division (EAD) illustrates the country’s endeavors to strengthen its financial position, offering a dynamic perspective on Pakistan’s financial activities. In September 2023, the country received $320.92 million, reflecting a change from $625.86 million in September 2022, highlighting fluctuations in monthly inflows.
IMF Tranche and UAE Funding Contributions
Although the government had allocated $2.4 billion from the International Monetary Fund (IMF) for FY24, the EAD data currently does not incorporate the $1.2 billion received as the initial tranche of the $3 billion Stand-By Arrangement (SBA) in July 2023.
Furthermore, the data excludes reference to the $1 billion provided by the UAE. When factoring in these inflows, Pakistan’s cumulative foreign loans for the first three months of the fiscal year would significantly increase to $5.727 billion.
Saudi Arabia’s $2 Billion Time Deposit
In July 2023, one of the noteworthy highlights was the reception of a substantial $2 billion from Saudi Arabia in the form of a time deposit.This contribution assumes a critical role in Pakistan’s foreign financing endeavors.
No foreign commercial bank loans
In the first quarter of the fiscal year, the government did not receive any funds under this category despite having allocated $4.5 billion from foreign commercial banks in FY24.
Likewise, while Pakistan had budgeted for $1.5 billion from bond issuances, the country has not issued any bonds to date, leading to no funds being received in this segment.
Pakistan’s financial environment is in a state of flux, characterized by substantial borrowing and assistance from diverse international sources, laying the groundwork for potential economic growth in the coming months.
