Daily Times

Economic Affairs Division on Friday released its first Annual Report on Foreign Economic Assistance which provides comprehensive analysis of Pakistan’s external inflows, outflows, external public debt and debt servicing. Objective of the report is to provide readers including researchers, economists and development partners with the opportunity of gaining deeper understanding of external economic assistance position of Pakistan.

Government of Pakistan has been receiving foreign economic assistance mainly to achieve two major strategic objectives: (a) sustainable social & economic growth as envisioned in its development plans to reduce poverty and inequality; and (b) to address the fiscal imbalances for enhanced macroeconomic stability.

The report reflects that Government signed new agreements worth US$ 10.4 billion with various development partners and foreign banks as compared to US$ 8.4 billion last year, registering growth of 23.8%. Under the new agreements, the development partners are likely to disburse the committed amount in the next five to six years. These commitments are helpful to support socioeconomic development projects, economic reforms and balance of payments.

During FY 2019-20, an amount of US$ 10.7 billion was disbursed by multilateral & bilateral development partners and foreign banks. More than two-third of the total disbursement was from multilateral& bilateral development partners such as Asian Development Bank (ADB), World Bank (WB), Asian Infrastructure Investment Bank (AIIB), China, Saudi Arabia& UK, etc. Increased level of external inflows from multilateral & bilateral development partners is indicative of their confidence in development priorities and policies of the government including implementation of reforms in the priority areas of fiscal &debt management, energy sector and ease of doing business.

New external commitments have longer maturity period and concessional terms which is a reflection of robust composition of our external inflows and debt profile. Analysis further reveals that composition of external public debt has improved as share of concessional external loans with longer maturity increased by US$ 3.87 billion while the share of market-based instruments has declined by US$ 2.06 billion.

The Government also paid an amount of US$ 10.4 billion during the FY 2019-20 on account of debt servicing of external public debt including principal amount of US$8.5 billion and interest payment of US$ 1.9 billion.

Looking ahead, the government expects to maintain this positive trend of external economic assistance with the continued support of our development partners.