ISLAMABAD: Mainly supported by the International Monetary Fund (IMF) program, Pakistan has secured foreign entries of $ 1,622 billion in the first two months (July-August) of the current fiscal year, almost 100 percent more than $ 820 million last year.
The latest data from the Economic Affairs Division on foreign assistance, a classification that includes loans and donations, shows that foreign entries amounted to Rs258.6bn ($ 1.622bn) in two months compared to Rs102.67bn ($ 820 million) of the same period last year.
The year-round target for foreign entries is Rs3.032 billion (about $ 19 billion) for the entire fiscal year 2019-20 against last year's budget target of $ 9.7 billion (Rs1.113 billion) . Last year, the government secured around $ 16 billion in loans, including single injections from Saudi Arabia, China and the United Arab Emirates.
EAD data showed that Pakistan received about $ 919m (Rs146bn) from multilateral lenders, $ 321.5m (Rs51.7bn) from commercial loans and $ 382m (Rs61bn) from bilateral lenders.
From the target of $ 19 billion for the current fiscal year, the government obtains foreign loans for $ 1,622 billion, grants in two months
Of the commercial loans of $ 321.5 million, most of $ 148 million was provided by CitiBank, $ 123.3 million by Dubai Bank and $ 50 million by Suisse AG, United Bank Limited and Allied Bank Limited.
With an assistance of $ 919 million from multilateral agencies, the Asian Development Bank provided the bulk of $ 529 million, followed by $ 285 million by the Islamic Development Bank, $ 83 million by the World Bank Group and $ 22 million by the International Fund for Agricultural Development (IFAD).
Among the bilateral lenders, China topped the list with a loan of $ 158 million, followed by Saudi Arabia with a loan of $ 108 million, $ 81 million in the United Kingdom, $ 16 million in Japan, $ 12 million in the United States and $ 6.58 million in Germany.
The total foreign influx overwhelmingly included loans of $ 1.49 billion and grants of $ 132 million.
The data showed that in the first two months of 2018-19, China had remained in the first position with $ 297 million, followed by $ 200.5 million from the Islamic Development Bank, $ 75 million from the Asian Development Bank. During the same period last year, total loans granted by commercial banks amounted to $ 70 million.
The ADB made the largest loan disbursement of $ 500 million for commercial and competitive projects, while the flow of Chinese loans of $ 158 million went to the Sukkur-Multan, Lahore Orange Train and Havelian-Thakot Karakoram Highway.
Authorities said the best disbursements of foreign assistance were mainly supported by the IMF's general program that promised $ 6 billion in three years. However, the IMF program provides comfort to credit agencies, bilateral lenders, capital markets and commercial banks to make their financing windows available under which the IMF and Pakistan authorities expect more total entries of $ 37 billion in three years.
They said that the budgeted entries were intended to finance longer-term projects and programs and flow into the system as part of the balance of payments support. Pakistan expects the current account financing requirement for the current fiscal year to be approximately $ 8 billion versus $ 13 billion last year.
Last week, the IMF said Pakistan's economic program had a promising start, but that decisive implementation was critical to pave the way for stronger and more sustainable growth, as national and international risks were still there and the challenges Structural economic persist. Therefore, he said, the authorities must move forward with their reform agenda.
While acknowledging that progress had been made in some key areas, the IMF said the government's economic reform program was still in its early stages. "The transition to an exchange rate determined by the market has begun to offer positive results in the external balance, the volatility of the exchange rate has decreased, monetary policy is helping to control inflation and the SBP [State Bank of Pakistan] it has improved its foreign exchange reserves, "the IMF observed.
Posted on Dawn, September 24, 2019