ISLAMABAD: Pakistan has received $11.068 billion in foreign loans and grants during the first 10 months of the current fiscal year 2025-26, according to data released by the Economic Affairs Division (EAD).

This marks an increase of $4.468 billion, or approximately 68 percent, compared to $6.6 billion received in the same period last fiscal year. The inflows include both multilateral and bilateral assistance along with commercial financing.

The $11.068 billion is equivalent to Rs3,103.53 billion at applicable exchange rates. This amount comprises Rs34.33 billion in grants, with the remainder in loans.

Non-project aid formed the largest share at $8.31 billion. Project aid stood at $2.75 billion during July to April.

**Official Figures and Composition**

The Economic Affairs Division documented these disbursements from multiple development partners. In April 2026 alone, Pakistan received $395.63 million in foreign assistance.

Bilateral inflows in April included $101.68 million from Saudi Arabia and smaller amounts from other partners. Multilateral institutions continued to provide the bulk of project-related support.

Compared to the previous year’s $6 billion (equivalent to Rs1,696 billion at that time), the current year shows an 82 percent rise in dollar terms when aligned with initial reporting figures. This surge reflects renewed engagement with international financial institutions and friendly countries.

**Debt Management Context**

Pakistan’s external public debt stood at around $91.8 billion as of June 2025. The fresh inflows have helped meet financing requirements amid a fiscal deficit and debt servicing needs.

Interest payments on public external debt have risen significantly in recent years, increasing from $1.99 billion in FY2022 to $3.59 billion in FY2025. This highlights the growing burden of external obligations.

The government has focused on a mix of new disbursements, rollovers from key bilateral partners including China, Saudi Arabia, and the UAE, and timely repayments. In recent months, Pakistan successfully met external debt obligations exceeding $1.43 billion, including a $1.3 billion Eurobond maturity.

**Role of Multilateral Partners**

The International Monetary Fund remains a key anchor. Under the ongoing Extended Fund Facility, disbursements have supported balance of payments stability. Recent IMF reviews have noted progress on fiscal targets and structural reforms.

The World Bank and Asian Development Bank have provided project loans for infrastructure, energy, and water sectors. These funds target long-term development while addressing immediate financing gaps.

Grants component, though smaller at Rs34.33 billion, supports social sector initiatives and technical assistance programmes. Non-project aid has primarily helped budget support and foreign exchange reserve building.

**Economic Stabilisation Measures**

These external inflows arrive as Pakistan maintains foreign exchange reserves around $16 billion in early 2026. The State Bank of Pakistan has used part of these resources to strengthen the rupee and ensure import cover for essential commodities.

Inflation has moderated to single digits in recent months, though core challenges in revenue collection and expenditure control persist. The fiscal year 2025-26 budget emphasised privatisation, tax base broadening, and energy sector reforms to reduce future borrowing needs.

Public debt to GDP ratio stands at approximately 70 percent including IMF obligations. External debt constitutes around 22 percent of GDP according to recent projections.

**Market and Diplomatic Reactions**

Financial markets have responded positively to steady inflows, with improved sentiment around Pakistan’s ability to meet obligations. Credit rating agencies continue to monitor debt dynamics closely.

Bilateral partners have reiterated support tied to reform implementation. Saudi Arabia, UAE, and China remain critical pillars through deposits, rollovers, and investment commitments.

Domestically, the inflows provide breathing space for development spending. However, analysts note that reliance on external financing underscores the need for stronger domestic resource mobilisation.

**Strategic Implications**

The higher borrowing supports short-term stability but raises questions about medium-term debt sustainability. Pakistan aims to reduce external financing needs through export growth and FDI attraction.

Future disbursements will depend on continued IMF programme performance and progress on structural benchmarks. Upcoming reviews in 2026 will determine further tranches.

The government is expected to present updated debt management strategies in the next budget. Focus areas include diversifying creditors, extending maturities, and improving export competitiveness to ease pressure on the external account.

Regional economic dynamics, including trade with Central Asia and the Middle East, could influence future inflows. Sustained reform implementation remains key to transitioning from high borrowing to self-reliant growth.