ISLAMABAD          -          Pakistan has borrowed $2.53 billion under foreign economic assistance during four months (July to October) of the current fiscal year. 

Pakistan has received $2.5 billion as loan from multilateral and bilateral sources and commercial banks in four months. The amount is over 19 percent of the annual borrowing. The government of Pakistan had projected to borrow $12.957 billion from multilateral and bilateral creditors and commercial banks in the year 2019-20. However, borrowing from International Monetary Fund (IMF) would not be part of the $12.957 billion. Pakistan had so far received $991 million from the IMF in July this, which has not included in $2.5 billion that government borrowed in four months of the current fiscal year.

According to the data of Ministry of Economic Affairs, the country has borrowed $1.06 billion from the multilateral, $473.18 million from bilateral sources and $784.97 million from commercial banks during first four months of the current fiscal year. Meanwhile, the government has also borrowed $205.43 million from Saudi Arabia as short-term, making the total borrowing at $2.53 billion.

The data showed that government borrowed $784.97 million from foreign commercial banks. The federal government had budgeted to borrow $2 billion foreign commercial loans during ongoing financial year. China disbursed $295.24 million in the first four months of fiscal year 2019-20. The Islamic Development Bank disbursed $303.68 million in July to October out of the total of $1.1 billion budgeted for the current fiscal year. Asian Development Bank (ADB) disbursed $573.9 million, United Kingdom (UK) $106.69 million, World Bank $105.06 million, International Fund for Agricultural Development (IFAD) $25.89 million, USA $30.73 million and Japan $21.25 million in the first four months of current fiscal year.

The amount of borrowing from external sources would increase in the months to come. The ministry of finance had already initiated the process of issuing Eurobonds and international Sukuk to raise the foreign exchange reserves of the country. Pakistan has planned to raise at least one billion dollars from international market by issuing Sukuk bonds in next couple of months that would help in building the country’s foreign exchange reserves

It is worth mentioning here that Pakistan’s overall debt is continuously increasing. Pakistan’s overall debt and liabilities had mounted to Rs41.5 trillion by the end of September. The latest data of State Bank of Pakistan (SBP) showed that Pakistan’s domestic debt surged to Rs22.6 trillion with addition of Rs5.73 trillion in last one year. Meanwhile, the country’s external debt was recorded at Rs10.7 trillion by the end of September.  In dollar terms, Pakistan’s external debt and liabilities stood at $106.9 billion. The debt taken by Pakistan from the International Monetary Fund (IMF) increased in rupee terms to Rs992.7 billion. Loan from IMF was Rs740.7 billion in September last year.

The International Monetary Fund (IMF) in its report, the Fiscal Monitor 2019, had projected that Pakistan’s general government debt at 76.7 percent of the GDP in last fiscal year. However, it estimated that debt would further go up to 78.6 percent in ongoing fiscal year.