Pakistan to borrow $17 billion loan in FY23 to avert default
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During the initial two months of the fiscal year 2023-24 (FY24), the nation acquired a substantial amount of $3.206 billion from a diverse array of financial sources, in stark contrast to the mere $439.32 million borrowed during the same period in FY23. These revelations emerge from data provided by the Economic Affairs Division (EAD). Furthermore, the data illustrates that in August 2023, the nation received $316.14 million, contrasting with the $252.25 million it garnered in August 2022.
Among the notable components of the $3.206 billion, a substantial $2 billion was procured from Saudi Arabia under the category of time deposits in July 2023. Interestingly, the government had originally projected an influx of $4.5 billion from foreign commercial banks for the ongoing fiscal year, FY24; however, no funds were received under this category during July and August. This deviation from the budgeted estimates raises pertinent financial questions.
In an effort to fuel its fiscal ambitions for the current fiscal year, the government had outlined an extensive budget of $17.619 billion, encompassing $17.384 billion in loans and $234.60 million in grants from multiple financing sources. The preceding fiscal year, FY23, saw the country secure $10.844 billion from various financing channels, inclusive of $2.206 billion from foreign commercial banks, notably falling short of the anticipated foreign assistance budgeted at $22.817 billion. Importantly, this sum did not account for the rollover of deposits amounting to $6 billion, equally distributed between China and Saudi Arabia, and the refinancing of a Chinese loan standing at $1.3 billion.
Moreover, a noteworthy development in the fiscal landscape emerged as the country garnered $140.82 million under the category of "Naya Pakistan Certificate" during the initial two months of the fiscal year 2023-24. This underscores the multifaceted nature of the nation's financial strategy, as it navigates through various financial instruments to meet its fiscal needs and aspirations.
