Pakistan secures nearly $6 billion from global sources in FY24

Bilateral development partners also played a crucial role, providing $138.72 million in December and $723.13 million in 6MFY24.

Pakistan has secured external financing amounting to $5.968 billion in the first half of the fiscal year 2024 (1HFY24), as reported by the latest monthly update from the Economic Affairs Division (EAD).

This was recorded in line with the annual budget estimates of $17.62 billion set for the entire fiscal year.

According to the report, December alone witnessed a substantial influx of external financing, reaching $1.621 billion. This figure comprises $1.609 billion in loans and $12.16 million in grants from various sources.

Breaking down the total financing amount, the government acquired a $517.8 million loan for non-project aid.

This includes $172.83 million in the form of programme/budgetary support assistance to restructure Pakistan’s economy, $249.38 million by DPC, and the remaining $95.18 million for the SFD oil facility during the month.

Details provided by the EAD indicate that disbursements from bilateral and multilateral development partners maintained a robust trend, totaling $1.537 billion in December and $2.968 billion during the first six months of FY24. These healthy inflows have significantly contributed to the improvement of foreign exchange reserves.

The Ministry of Economic Affairs emphasised that the country continues to rely on foreign commercial borrowing, with an amount of $83.96 million obtained through the Naya Pakistan Certificate in December 2023.

In terms of foreign assistance from multilateral sources, Pakistan received nearly $1.398 billion in December and $2.245 billion in 6MFY24.

Among the contributors in December, the International Development Association-World Bank (IDA) led with $638.1 million, followed by the Asian Development Bank (ADB) with $468.96 million, the Asian Infrastructure Investment Bank (AIIB) with $254.6 million, the International Bank for Reconstruction and Development (IBRD) with $29.33 million, and the International Fund for Agricultural Development (IFAD) with $7.83 million.

On a cumulative basis, IDA emerged as the major contributor to multilateral lending, with total disbursements amounting to $1.04 billion, followed by ADB with $589.43 million and AIIB with $287.04 million.

Bilateral development partners also played a crucial role, providing $138.72 million in December and $723.13 million in 6MFY24. Notably, Saudi Arabia (Oil Facility) contributed $95.18 million, followed by China with $33.92 million, Germany with $7.63 million, and the USA with $1.74 million during the month under review.

In the first six months of FY24, Saudi Arabia (Oil Facility) held the majority proportion, with disbursements reaching $595.18 million.

This positive trend in external financing reflects the confidence of the international community in Pakistan’s economic stability and growth prospects.

The inflow of funds is expected to further support the country’s economic development initiatives and enhance its foreign exchange reserves.

While,

SBP reports weekly drop in forex reserves amid debt repayments

During the week ending January 12, 2024, the State Bank of Pakistan (SBP) witnessed a reduction in its foreign exchange reserves by $127 million, bringing the total to $8,027.4 million.

This decline was attributed to debt repayments, as disclosed in data released on Thursday.

The overall liquid foreign reserves of the country were reported at $13.15 billion, with commercial banks holding net foreign reserves amounting to $5.12 billion.

Notably, the SBP’s reserves had decreased by $66 million in the previous week.

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In a significant development, Pakistan received a substantial tranche of $705.6 million from the International Monetary Fund (IMF), as announced in a statement by the SBP on Wednesday.

This disbursement, equivalent to SDR 528 million, was received on January 16, 2024, following the successful completion of the first review by the Executive Board of the IMF under the Standby Arrangement (SBA).

The SBP clarified in a post on X that this disbursement would be reflected in its reserves for the week ending January 19.

The decrease in reserves during the reported week was primarily due to the aforementioned debt repayments.