Pakistan received $7.41 billion external inflows during the first nine months of the current fiscal year (July-March 2020-21) from multiple financing sources, which are 61 percent of the annual budget estimates of $12.23 billion for the entire financial year.
According to the data shared by the Economic Affairs Division, the country continued to rely on foreign commercial borrowing as it was recorded at $3.12 billion in 9MFY21 out of $7.41 billion (42 percent) owing to the repayment of maturing foreign commercial loans.
In the month of March 2021, the country obtained $204.82 million external inflows from multiple financing sources including $10 million from a consortium of Suisse AG, UBL and ABL. Going into details made available by EAD, out of $7.41 billion, the government received $1.35 billion or 18% in the form of program/budgetary support assistance to restructure Pakistan’s economy, $1.35 billion (20%) as project assistance to finance its development projects for improving the socio-economic development of the country and for asset creation and $439 million (6%) as commodity financing while $1 billion (15%) received as safe deposits from China.
The disbursement from bilateral and multilateral development partners also maintained a strong trend and is $3.29 billion of foreign economic assistance during 9MFY21 against the budgetary allocation of $5.811 billion for FY21 on concessional terms with a longer maturity. These healthy inflows also helped to improve foreign exchange reserves and exchange rate stability, the monthly bulletin of Foreign Economic Assistance by the EAD reported.
Amongst the multilateral development partners, Asian Development Bank provided $1.25 billion and World Bank $938 million against the budgetary allocation of $2.257 billion.
While collective disbursement from bilateral donors amounted to $368 million during July-Mar FY21 wherein Pakistan received $147.5 million from China, followed by the United States with $86.2 million and France with $34.8 million.
Increased level of external inflows from multilateral and 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 and debt management, energy sector, and ease of doing business.
The strong official inflows during the nine months of the current fiscal year helped the government to discharge its external public debt obligation of $4.87 billion against the annual repayment estimates of $10.36 billion for the entire Fiscal Year. Of which, $4 billion (82% of total external public debt servicing) was repaid as principal and $862 million (18 percent) as interest on the outstanding stock of external public debt.