Islamabad, Aug 28: The government made a dismal start and got just $436.4 million in foreign assistance and grants in July, nearly 85 percent less than the same month the previous year, pending confirmation of the $7 billion bailout by the IMF’s executive board.
The $426 million in foreign loans and $10.5 million in grants in the first month of the current fiscal year seems nonsensical when compared to the enormous $19.4 billion target for foreign assistance set for FY25 which is even larger than the $17.4 billion objective from the previous year that was missed by $7.6 billion.
Pakistan realized about $2.89 billion in July of last year, primarily as a result of the 9-month $3 billion Stand-By Arrangement (SBA) that was signed with the IMF. Consequently, Saudi Arabia provided Pakistan with a significant infusion of $2 billion in time deposits. In July 2023, inflows totaled $5.1 billion, of which $1.2 billion came from the IMF and an additional $1 billion from the UAE.
The Ministry of Economic Affairs reported on Tuesday that, in comparison to $2.89 billion in the same month previous year, it had received $436.39 million in total foreign inflows.According to it, $19.393 billion in foreign economic assistance, including grant estimates of $176.3 million, will be provided during 2024–2025. According to the EAD, of the $436 million in inflows, the majority ($307 million) was received as project funding, down from $640 million in July of the previous year by nearly 52 percent.
In July, Pakistan received $201 million from multilateral lending institutions (excluding the IMF), which is a little more than the $194 million it received in July of last year, when the objective for the entire year was $5.34 billion,with the exception of three strategically supportive lenders, all bilateral inflows in the first month of the year totaled $108 million, falling short of the $523 million objective for the entire year. By contrast, the authorities only managed to acquire $114 million in July 2023 out of the $882 million annual objective. Certificates from Naya Pakistan brought in an additional $128 million.
The current fiscal year’s $19.39 billion aim comprises $5.05 billion from multilateral and bilateral lenders, $1 billion in international bonds, $3.8 billion in foreign commercial loans, $5 billion from Saudi Arabia in time deposits, and $4 billion in safe deposits from China.The government also anticipates receiving $100 million from ECO Trade Bank and approximately $465 million from abroad Pakistanis using Naya Pakistan Certificates. The government had allocated $22.8 billion for foreign aid year 2022–2023, but due to the IMF program’s suspension, it could only really provide $10.8 billion, or 46% of the total. This $11.8 billion shortfall caused foreign exchange reserves to be depleted.
