ISLAMABAD: Pakistan secured $12.5 billion in foreign loans during the first nine months of the fiscal year 2024–25, falling short of its annual target of $19.2 billion set for completion by June 30.
According to the Economic Affairs Division’s (EAD) latest monthly report on Foreign Economic Assistance (FEA), more than half of the total inflows consisted of rollover loans from key allies — China, Saudi Arabia, and the United Arab Emirates. Fresh loans and grants during this period amounted to $5.51 billion, representing a nearly 20% decline compared to the same period last year.
The EAD noted that the FEA received between July and March was significantly below the revised target of $19.4 billion. In comparison, during the same period last fiscal year, Pakistan received $6.9 billion against a $17.6 billion target.
Notably, the report excludes approximately $1 billion disbursed by the International Monetary Fund (IMF) in October as part of the $7 billion Extended Fund Facility (EFF), as this is separately recorded by the State Bank of Pakistan. A similar accounting treatment was applied to the $1.2 billion disbursed under the IMF’s Stand-By Arrangement (SBA) in the previous year.
The total foreign assistance — including rollovers — stood at $12.46 billion for the nine-month period. This figure includes $3 billion rolled over by Saudi Arabia, $2 billion by the UAE, and $1 billion by China. China has since extended an additional $2 billion rollover, bringing its total to $3 billion. Pakistan’s overall rollover portfolio from these three countries amounts to roughly $12.7 billion in safe deposits and loans, underscoring the country’s ongoing net international reserves (NIR) deficit.
The drop in fresh inflows is attributed largely to delays in the IMF programme, which in turn held back additional funding. Inflows recorded during the July–March period were about 20.2% lower year-on-year — falling from $7.9 billion (including IMF support) to $5.5 billion.
March 2025 saw foreign assistance inflows of $555 million, a moderate increase from $365 million in February, though down from $830 million in January.
Of the $5.5 billion received so far in FY25, approximately $3 billion was in the form of budgetary support or programme loans, while $2.4 billion was allocated to project financing. In comparison, last year’s figures were $4.7 billion in programme loans and $2.2 billion in project aid.
Multilateral institutions provided $2.83 billion in the current fiscal period, slightly up from $2.7 billion last year. However, bilateral support dropped significantly to $358.5 million from $870 million previously.
Pakistan also received $504 million in commercial loans from UAE-based lenders, signaling a slight revival in financing from foreign banks, which had largely withdrawn support in the previous year. Despite budgeting $3.8 billion in foreign commercial bank financing for FY25, progress has been limited, again due to IMF-related delays.
The government has additionally projected $1 billion in international bond issuance for the current fiscal year. A combined $9 billion in inflows from Saudi Arabia and China — including a $5 billion time deposit from Riyadh and a $4 billion SAFE deposit from Beijing — is also anticipated. These projections are considered essential for bridging Pakistan’s external financing gap under the IMF programme.
Moreover, remittances through the Naya Pakistan Certificates reached $1.455 billion, up from $781 million in the same period last year, indicating strong participation from overseas Pakistanis.
Among multilateral lenders, the Asian Development Bank disbursed $1.189 billion — nearly double last year’s $665 million — while the World Bank contributed $979 million.
