Pakistan secures $315.6 million in external financing in January 2024

WEB DESK: In a positive economic development, Pakistan has secured external financing amounting to $315.59 million in January 2024, as revealed in the latest monthly report by the Economic Affairs Division (EAD).

The financing, consisting of $329.24 million in loans and $2.34 million in grants from various sources, contributes to the total external financing of $6.307 billion in the first seven months of the fiscal year 2024.

This figure, although significant, falls short of the annual budget estimates of $17.62 billion for FY24.

Breaking down the loan components, the government acquired a $203.63 million loan for non-project aid. This includes $103.63 million designated for programme and budgetary support assistance to facilitate the restructuring of Pakistan’s economy.

Additionally, the remaining $100 million was secured for IsDB (short-term) during the month.

Details provided by the EAD indicate a robust trend in disbursements from bilateral and multilateral development partners, reaching $227.95 million in January and $3.2 billion during the first seven months of FY24.

These inflows have not only supported the economy but have also contributed to an improvement in foreign exchange reserves.

The Ministry of Economic Affairs emphasised the country’s reliance on foreign commercial borrowing, highlighting a notable $103.63 million obtained through the Naya Pakistan Certificate in January 2024.

Multilateral assistance played a significant role, with disbursements reaching nearly $166.95 million in January and $2.41 billion in the seven-month period.

Notably, IsDB (short-term) led in January with $100 million, followed by contributions from the Asian Development Bank (ADB), the International Development Association-World Bank (IDA), the International Bank for Reconstruction and Development (IBRD), and the Asian Infrastructure Investment Bank (AIIB).

On a cumulative basis, IDA emerged as a major contributor to multilateral lending, with disbursements totaling $1.06 billion, followed by ADB with $620 million and AIIB with $292.96 million.

Bilateral development partners contributed $61 million in January and $794.61 million in FY24. Noteworthy contributors during the month included Saudi Arabia with $58.88 million, Japan with $1.28 million, China with $7.92 million, the USA with $0.58 million, and Germany with $0.26 million.

Saudi Arabia, specifically through the Oil Facility, dominated the cumulative disbursements with $595.18 million during the first seven months of FY24.

This positive trend in external financing reflects the international community’s confidence in Pakistan’s economic trajectory, providing crucial support for ongoing developmental initiatives and fiscal stability.

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