Pakistan secures loans of $436.39 million in July

Pakistan has secured only about $436.39 million in foreign loans and grants in July, primarily due to delays in getting International Monetary Fund (IMF) Executive Board approval for a new $7 billion loan program.

According to official data released by the Ministry of Economic Affairs on Tuesday, the loan amount constitutes $201.01 million from multilateral sources, $107.68 million from bilateral sources and $127.70 million from Naya Pakistan Certificates.

The government had estimated about $19.3bn in foreign assistance in the budget for fiscal year 2024-2025 — $19.2 billion in loans and $176.2 million in grants.

Pakistan had reached a staff-level agreement with the IMF on a 37-month Extended Fund Facility Arrangement of $7 billion last month. According to sources from the Ministry of Finance, the delay in IMF Executive Board approval is due to Pakistan’s difficulty in securing an additional $3-5 billion to plug its financing gap.

According to the Economic Affairs Division, Pakistan has borrowed $111.88 million from International Development Association, $54.05 million from Asian Development Bank, $20.54 million from International Bank for Reconstruction and Development, $8.54 million from Asian Infrastructure Investment Bank, $4.54 million from International Fund for Agricultural Development, $0.75 million from the Organization of Petroleum Exporting Countries and $0.71 million from Islamic Development Bank.

On the other hand, China remained the biggest lender as Beijing gave $96.76 million, followed by Saudi Arabia at $2.69 million while USA, Germany and Japan gave $4.42 million, $3.56 million and $0.25 million, respectively, in grants.

According to EAD, Pakistan secured $307 million under project aid and $127 million under non-project aid.

The government had estimated that it would secure $1 billion from raising bonds, $3.7 billion from foreign commercial loans, $100 million from ECO trade bank, $5 billion from Saudi Arabia's deposit and $4 billion from SAFE China deposit. However, Islamabad could not obtain any loan so far.