Pakistan's foreign loan inflows decreased by 25%

Pakistan has received nearly $12 billion in foreign loans during the first eight months of the 2024-25 fiscal year. The country aims to surpass its target of $19.2 billion by the end of June. Of the total loans, approximately half came from rollovers by China, Saudi Arabia, and the United Arab Emirates. New loans and grants amounted to $5.95 billion, which is a 25% decrease compared to the same period last year. The Economic Affairs Division (EAD) reported these figures in their monthly Foreign Economic Assistance report. For the first eight months, total economic assistance was around $4.95 billion, down from $6.68 billion the previous year. This figure does not include a $1 billion loan from the International Monetary Fund (IMF) received last October, which is counted separately by the State Bank of Pakistan. Included in the total assistance this year are $3 billion from Saudi Arabia, $2 billion from the UAE, and $1 billion from China. Recently, China provided an additional $2 billion in rollovers. Despite these inflows, Pakistan's net international reserves remain significantly negative. The EAD reported a decline of about 26% in inflows, attributed to delays in IMF payments. In February alone, inflows dropped to $365 million, from $830 million in January. Most of the assistance was for budgetary support and project financing. Inflows from multilateral lenders totaled $2.49 billion, down from $3.8 billion last year. The report also noted that overseas Pakistanis contributed about $1.3 billion through Naya Pakistan Certificates, a significant increase from $590 million the previous year. Overall, the government expects to receive $9 billion from bilateral partners, particularly from Saudi Arabia and China, crucial for bridging the external financing gap as part of the IMF program.