ISLAMABAD: Pakistan's total external public debt stood at $77.9 billions as of June 30, 2020 compared to $73.4 billion a year ago, registering 6 percent growth, says Ministry of Economic Affairs Division (EAD).
The Ministry released annual report on foreign economic assistance (FY 2019-20) on Friday noted that as of June 30, 2020, 70 percent of total external public debt consists of loans at fixed interest rates while remaining 30 percent loans are obtained on floating interest rates.
The composition of external public debt demonstrates that Pakistan' external public debt is derived from three key sources. Major source is multilateral debt (comprising of 51 percent inclusive of IMF (10 percent), followed by bilateral 31 percent (inclusive of China' SAFE deposits (4 percent)), 10 percent from foreign commercial banks and 8 percent bonds (inclusive of Eurobonds and Sukuk).
The report further stated that during fiscal year 2019-20, the government of Pakistan signed new agreements worth $10.447 billion with various development partners and foreign commercial banks as compared to $ 8.4 billion a year before, registering growth of 23.8 percent. Under the new agreements, the development partners are likely to disburse the committed amount in the next five to six years.
Out of this, 99 percent of the new commitments were for the loans and rest of the 1 percent was for the grants commitments. Out of total new agreements, $6.791 billion worth of financing agreements were signed with multilateral development partners, $3.463 billion with foreign commercial banks and $193 million with bilateral development partners.
Around $3.463 billion worth of agreements, which constituted 33 percent of the total new commitments, were by the commercial banks. The Asian Development Bank emerged as the largest development partner in terms of new commitments of foreign economic assistance $3.112 billion (30 percent) followed by World Bank $2.239 billion (22 percent), Islamic Development Bank $756 million (7 percent) and Asian Infrastructure Investment Bank $540 million (5 percent). These five financial institutions extended financing of around 98 percent of total new commitments.
The report further noted that 69 percent of the new commitments during fiscal year 2019-20 were made under the category of budgetary support. This high level of budgetary support was secured mainly to offset socio-economic impact of COVID-19 pandemic and to meet the higher external financing requirements for external debt retirements. About 26 percent of the new commitments were allocated for project financing while the rest of the new commitments i.e. 5 percent were for the commodity financing.
Copyright Business Recorder, 2020
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