Pakistan secures nearly $680 million in external financing in August

ISLAMABAD: Pakistan managed to secure external financing worth $679.79 million in August 2025, according to the Economic Affairs Division (EAD). While this marked a sharp 151 percent rise compared to the same month last year, it was still 2.1 percent lower than July’s inflows.

The breakdown shows that $675.67 million came as loans, while only $18.86 million arrived as grants. August alone accounted for 3.4 percent of the government’s annual target of $19.39 billion for fiscal year 2025-26.

A slow start to the year

According to Mettis Global, during the first two months of FY26, the country received $1.38 billion in external assistance, equal to just 6.9 percent of the yearly goal. The sluggish pace has raised concerns about whether Pakistan will manage to achieve its financing targets.

For perspective, in the previous fiscal year the government had projected $17.62 billion in foreign assistance but could only secure $9.81 billion by year-end.

Key contributors

Multilateral lenders once again took the lead in August, with the World Bank Group (IBRD/IDA) emerging as the single largest contributor by providing $228.43 million. The Asian Development Bank (ADB) followed with $89.5 million, continuing its support across infrastructure and social sectors.

The Islamic Development Bank (IsDB) also played a major role, disbursing $311.43 million, mainly through short-term trade financing. Altogether, bilateral and multilateral partners contributed $511.46 million in August and a total of $1.01 billion during the first two months of FY26.

Missing commercial inflows

One major gap has been foreign commercial borrowing. In August, Pakistan raised $168.33 million through the Naya Pakistan Certificate, taking the two-month tally to $364.55 million. However, not a single dollar has yet been secured from foreign commercial banks, even though the government had budgeted $3.78 billion from this source for the year.

Loans for budget support

Out of the August inflows, $448.06 million was disbursed as non-project aid, meant for budgetary support and economic restructuring. This figure also represents the total non-project aid received so far in FY26.

While August brought some relief through multilateral and bilateral partners, the inflows remain far behind the government’s ambitious projections.

With less than 7 percent of the annual target achieved in the first two months, policymakers face an uphill battle to bridge the gap, especially if commercial borrowing and bilateral inflows do not pick up in the coming months.

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