Pakistan gets foreign loans worth $4.5bn in five months

Gross loans during July-Nov FY21 were equal to 37pc of the annual budget estimate of $12.23bn

ISLAMABAD: The federal government has borrowed $4.499 billion from multiple financing sources during the July-November period of the current fiscal year (2020-21).

According to data available with this scribe, the government’s borrowing has now reached 37pc of the FY21 budget estimates of $12.23 billion.

In the corresponding period of fiscal year 2019-20, the borrowing stood at $3.10 billion, which was around 24pc of the annual budgeted amount of $12.95 billion.

As per the documents, the total receipt of $4.499 billion constituted $1.3 billion or 29pc as programme/budgetary support assistance to restructure Pakistan’s economy; $1.62 billion (36pc) as foreign commercial borrowing to repay maturing foreign commercial loans; $518 million (12pc) as assistance to finance development projects; $60 million (1pc) as short-term credit; and $1 billion (22pc) as safe deposits.

Meanwhile, bilateral and multilateral development partners disbursed $1.87 billion of foreign economic assistance during July-November FY21, as against the budgetary allocation of $5.81 billion, on concessional terms with longer maturity.

Among the multilateral development partners, Asian Development Bank provided $712 million, while World Bank disbursed $694 million. From bilateral sources, France ,USA and China provided $33.4 million, $63.8 million and $21.8 million, respectively.

On the other hand, total servicing of external public debt during July-October FY21 was recorded at $2.45 billion against the annual repayment estimates of $10.36 billion for the entire fiscal year. Of the total, $2.03 billion (83pc) was repaid as principal while $415 million (18pc) was repaid as interest on the outstanding stock of external public debt.

In addition, the government also settled $1.29 billion worth of foreign commercial loans in the first four months of the current fiscal year. Similarly, the government also repaid $695 million to multilateral and $102 million to bilateral development partners.

Considering foreign exchange constraints, financing of development projects and repayments of these huge external public debts compel the incumbent government to further borrow from multiple sources, documents read.

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