Pakistan has secured $3.206 billion in loans in the first two months of the current fiscal year 2023-24, compared to $439.32 million borrowed during the same period of 2022-23, according to data from the Economic Affairs Division (EAD).
The government budgeted $2.4 billion from the International Monetary Fund (IMF) for the current fiscal year and has received $1.2 billion as the first tranche of the $3 billion Stand-By Arrangement (SBA) in July. However, the EAD data does not reflect this.
Additionally, there is no mention of $1 billion disbursed by the UAE. If the IMF and UAE inflows are added, total inflows are $5.405 billion during the first two months of the current fiscal year.
The $3.206 billion includes $2 billion from Saudi Arabia under the head of time deposit in July 2023. The data further shows that the government had budgeted $4.5 billion from foreign commercial banks. However, no money was borrowed under this head in July and August.
The government budgeted $1.5 billion from issuance of bonds, and here too the country is yet to issue bonds, hence no amount has been received under this account.
Pakistan had borrowed $10.844 billion from multiple financing sources, including $2.206 billion from foreign commercial banks, in 2022-23 against the budgeted foreign assistance of $22.817 billion. However, the $10.844 billion did not include the rollover of friendly countries’ deposits amounting to $6 billion ($3 billion each from China and Saudi Arabia), and re-financing of Chinese loans of $1.3 billion.
The Pakistani government is under pressure to improve its economic performance, as it faces a number of challenges, including high inflation, a widening current account deficit, and a depreciating currency. The IMF loan is expected to help Pakistan improve its economic stability and avert a balance of payments crisis.