Pakistan secures $402.96 million in external financing for May 2024

ISLAMABAD: Pakistan obtained external financing worth $402.96 million in May 2024 from various international sources, as per the latest monthly report by the Economic Affairs Division (EAD). The financing included $390.89 million in loans and $12.07 million in grants.

From July 2023 to May 2024 (11MFY24), Pakistan managed to secure a total of $7.55 billion in external financing, significantly below the annual budget estimate of $17.62 billion for FY24.

In May, the government acquired a $139.6 million loan designated for non-project aid. This loan, aimed at restructuring Pakistan’s economy, was part of the program/budgetary support assistance. Cumulatively, non-project aid loans reached $4.98 billion during 11MFY24.

The Ministry of Economic Affairs highlighted that Pakistan continued to rely on foreign commercial borrowing, which stood at $126.04 million in May 2024 and $1.02 billion over 11MFY24.

This borrowing was facilitated through the Naya Pakistan Certificate. However, no funds were secured from foreign commercial banks during 11MFY24, against the government’s budget estimate of $4.5 billion for FY24.

The EAD report further detailed that disbursements from bilateral and multilateral development partners remained robust, totaling $276.92 million in May and $4.02 billion for 11MFY24. Despite these inflows bolstering foreign exchange reserves, they fell significantly short of government expectations.

Specifically, foreign assistance from multilateral sources amounted to $265.89 million in May and $3.13 billion in 11MFY24. Financing from bilateral development partners reached $11.03 million in May and $888.93 million over the same period.

The EAD’s report underscores the ongoing challenges faced by Pakistan in securing adequate external financing to meet its budgetary targets, highlighting the need for more robust economic measures and international support to bridge the financing gap.

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