ISLAMABAD-Pakistan has borrowed $2.734 billion from external sources infirst quarter of the current fiscal year to maintain the country’s foreignexchange reserves. “During July-September of fiscal year 2020-21 theGovernment has received $2,734 million total external inflows from multiplefinancing sources which are 22 per cent of annual budget estimates of$12,233 million for the entire fiscal year 2020-21,” the Ministry ofEconomic Affairs noted in its latest report. In the corresponding period offiscal year 2019-20, the external inflows were $2,180 million which werearound (17 per cent) of the annual budgeted amount of $12.958 billion. Inthe aftermath of COVID-19 and its persistence in the country thedisbursements of project financing from development partners dried upduring the last quarter of the outgoing fiscal year 2019-20.
The pandemic has closed down most of the economic activities across thecountry including development project activities. However, after the easein the lockdown by the Government the economic activity is reviving whichmay lead to jack-up the project financing in the current fiscal year2020-21.
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The total receipt of $2,734 million constitutes $1,268 million or 46 percent as program/budgetary support assistance to restructure Pakistan’seconomy; $149 million (5 per cent) as foreign commercial borrowing to repaymaturing international Sukuk and other foreign commercial loans; and $317million (12 per cent) as project assistance to finance its developmentprojects activities for improving the socio-economic development of thecountry and for asset creation and $1,000 million received in terms of timesafe deposits. The bilateral and multilateral development Partners havedisbursed $1,585 million of foreign economic assistance duringJuly-September of ongoing fiscal year fiscal year 2020-21 against thebudgetary allocation of $5,811 million for fiscal year 2020-21 onconcessional terms with longer maturity.
Thanks Amongst the multilateral development partners, mainly AsianDevelopment Bank provided $637 million. World Bank disbursed $592 millionagainst the budgetary allocation of $2,257 million. While from bilateralsources, France, USA and UK provided $25.3 million, $52.3 million and $13.4million respectively.
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The loan amount would increase in the months to come, as the government isworking to issue bonds in international market to increase its foreignexchange reserves, which had started declining due to heavy loan repayment.After completion of all required formalities, the international capitalmarkets will be tapped during January/February 2021, the ministry offinance said.
The ministry had already initiated the process for engagement of FinancialAdvisors, which is expected to be completed by mid-November 2020. Aftercompletion of all required formalities, the international capital marketswill be tapped during January/February 2021.
