ISLAMABAD – Amid improving macroeconomic stability and fiscal prudence,another green shoot is the healthy inflows from official, multilateralsources. The IMF’s EFF agreement expects Pakistan to receive in FY20program loans worth $668 million from the World Bank and $800 million fromthe Asian Development Bank, Business Recorder has reported.
Project loans are forecast at $2.83 billion, of which $1.1 billion is tocome from China.
Let’s see how much of this $4.3 billion in financing from officialcreditors (bilateral and multilateral, not including IMF) has been receivedthus far. As per data from the Economic Affairs Division, the country hadreceived $1.74 billion – or 40 percent of the requirement – in the periodfrom July 2019 to October 2019. Both the project and program inflows areshowing visible improvements.
But it is the “multilateral financing” that provides an accurate picture asto how much the “donors” have gotten comfortable with the post-IMFdirection of the economy. In total multilateral financing in 4MFY20 periodhad reached $1.06 billion, which is more than double the same period lastyear.
The Asian Development Bank is leading the pack. The ADB has disbursed $574million in 4MFY20, which is more than three times the amount disbursed bythe Manila-based lender in the same period last year. Bulk of thisassistance is accounted for by a $500 million loan under “Trade &Competitiveness Program – subprogram 1″ – which is a loan to promotemacroeconomic stability.
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As for the World Bank, its two bodies – the IBRD and the IDA – hadcollectively disbursed $132 million in the four-month period, up 90 percentfrom the same period last year. The list of funded projects is varied;however, disbursements of more than $10 million have gone to projects like“Punjab Agriculture & Rural Transformation,” “Punjab Irrigated AgricultureProductivity Improvement” and “Sindh Resilience Project”.
There is another $303 million in disbursements from the Islamic DevelopmentBank (IDB), up 10 percent year-on-year. More funding has also come from thespecial UN agency for rural development, International Fund forAgricultural Development. IFAD disbursements totaled $26 million, up fourtimes from the year-ago period. This is mostly thanks to a $15 millionfresh loan for the “National Poverty Graduation Program” that is beingexecuted by the Pakistan Poverty Alleviation Fund.
The trajectory of inflows is positive for the balance of payment. And withmore projects being signed with multilaterals, a pipeline is being built tosecure future inflows. Reportedly, the World Bank has signed on loanagreements worth $650 million for Karachi uplift, $70 million for tourismdevelopment in Khyber Pakhtunkhwa, and $65 million as additional financingfor the CASA-1000 project.
