Pakistan’s foreign economic assistance inflows increased by 24 percent to $1.7 billion during the first two months of fiscal year 2026-27. The country received $1.703 billion in loans and grants during July and August. The figure excludes financing from the International Monetary Fund.
During the same period last year, Pakistan received $1.377 billion. The latest increase mainly reflects renewed commercial borrowing and stronger overseas Pakistani investments.
August Records Strong Growth in Inflows
Inflows rose significantly in August, reaching $940 million compared with $680 million a year earlier.
This represents a year-on-year increase of around 38 percent. Meanwhile, July inflows stood at $764 million, compared with $697 million during the same month last year.
According to government data, the increase was largely supported by commercial borrowing and investments in Naya Pakistan Certificates.
Pakistan received a $300 million commercial loan from United Bank Dubai during the two-month period. This marked a return of commercial borrowing after several years of limited access.
Overseas Pakistani Investments Increase
Overseas Pakistanis also contributed significantly to the rise in external inflows.
Investments in Naya Pakistan Certificates increased nearly 73 percent to $630 million during the first two months of FY2027.
The figure stood at $365 million during the corresponding period last year.
Of the latest investment, $182 million came through conventional certificates. Another $448 million was invested through Islamic certificates.
The increase highlights stronger participation by overseas Pakistanis in government-backed investment instruments.
Multilateral and Bilateral Financing Declines
Despite the overall increase, financing from international lenders declined sharply.
Inflows from multilateral and bilateral lenders fell by 43.24 percent to $626 million, compared with $1.103 billion a year earlier.
Bilateral inflows recorded the biggest decline. They fell by around 85 percent to $35 million from $232 million.
Meanwhile, multilateral financing decreased 24 percent to $591 million from $781 million.
Therefore, the overall rise in foreign assistance came despite a significant reduction in traditional development financing.
Government Sets $24 Billion Financing Target
The government has set a foreign economic assistance target of approximately $24 billion for FY2027.
This is higher than the $20 billion target set for FY2026. Pakistan ultimately received slightly more than $16 billion during the previous fiscal year.
The higher target reflects the government’s expectations for increased external financing during the current fiscal year.
However, achieving the target will depend on commercial borrowing, development financing and other external sources.
Most Inflows Used for Non-Project Financing
Of the $1.703 billion received during July and August, around $485 million was allocated for project financing.
Meanwhile, approximately $1.22 billion was classified as non-project financing.
This included around $258 million in loans for budget support.
The figures show that a significant portion of the external inflows was not directly tied to specific development projects.
United Bank Dubai Emerges as Largest Lender
United Bank Dubai was the largest lender during the first two months of FY2027.
It provided $300 million through commercial financing.
The World Bank followed with $286 million, while the Islamic Development Bank provided $191 million.
China ranked as the fourth-largest lender overall. It was also the largest bilateral lender, providing $146 million.
The Asian Development Bank contributed another $97 million during the period.
Overall, Pakistan’s external financing position improved during the opening months of FY2027. However, the decline in multilateral and bilateral assistance means commercial borrowing and overseas investment are playing a larger role in supporting the country’s external financing needs.
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