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ISLAMABAD, (MANEND NEWS): Pakistan’s ability to generate dollar loans shrinks significantly, as securing of foreign loans has dropped by 50 percent at a time when Islamabad is desperately looking for maximizing inflows.
“The government has been able to secure foreign loans of only $415.99 million in November 2023 against $846.76 million in the same month of the last financial year, witnessing a drop by almost 50 percent,” top official sources confirmed while quoting the figures released by the Economic Affairs Division (EAD) on Monday.
A money exchange employee counts dollars. — AFP/File
A money exchange employee counts dollars. — AFP/File
Ironically, Islamabad has so far failed to generate not a penny through foreign commercial loans despite making plans to generate $4.5 billion during the current fiscal year keeping in view higher interest rate in international markets.
The government also failed to launch any international bond despite envisaging $1.5 billion. If compared on five months (July-Nov) for 2023-24, Pakistan has received a total of $4.285 billion foreign loans against $5.11 billion obtained in the same period of the last financial year.
However, the Economic Affairs Division (EAD) did not incorporate $1.2 billion received from the IMF after approving $3 billion Standby Arrangement (SBA) program. After incorporating the IMF’s tranche, the total dollar inflows would touch $5.5 billion during the first five months of the current financial year.
Pakistan has envisaged to fetch $17.6 billion through foreign loans and grants during the current fiscal year out of which it secured $4.3 billion in first five months indicating that it was able to generate only 24 percent of the envisaged target.
It is relevant to mention that the last PDM-led government was able to generate major dollar inflows in July and first August 2023 including $1.2 billion from the IMF and $2 billion additional deposit from the Kingdom of Saudi Arabia.
After installation of caretaker setup, the pace of generating foreign loans has witnessed a slowdown in last few months period. Now it has resulted into evaporation of foreign exchange reserves held by the State Bank of Pakistan (SBP) which have decreased from $8.2 billion in July 2023 to $7.04 billion on December 8, 2023, indicating that the FER held by the central bank got depleted by $1.2 billion since July 2023.
From multilateral creditors, the World Bank (WB) remained on top for disbursement of its committed loans as under IDA, the bank disbursed $402.45 million and $88.19 million under IBRD during the first five months of the current fiscal year.
The disbursement from ADB stood at $120.47 million, AIIB $32.44 million, Islamic Development Bank (IDB) $100 million, IFAD $15.29 million and OPEC Fund $27.8 million. Pakistan has secured a guaranteed loan of $508 million for development of its PAF aircrafts.
Total disbursement from bilateral creditors stood at $583 million out of which Pakistan has secured $500 million oil facility from Saudi Arabia during the first five months of the current fiscal year.
USA has remained the second largest bilateral partner as Washington has disbursed $23.25 million during the first five months of the current financial year.
The other bilateral partners disbursed loans and grants to the tune of $8.25 million from China, $20.35 million from France, $3 million from Germany, $17 million from Japan and $10.98 million from Korea. Pakistan has secured $2 billion additional deposits from KSA during the current fiscal year. The government has generated $407.49 million through Naya Pakistan Certificates.