Jul-Mar of 2020-21: $7.413bn foreign debt from multiple financing sources incurred

ISLAMABAD: Pakistan incurred foreign debt of $7.413 billion from multiple financing sources during July-March of 2020-21 including $3.120 billion from foreign commercial banks (42 percent) with the total budgeted external loans of $12.233 billion for the entire fiscal year 2020-21.

The Economic Affairs Division (EAD) data released on Friday shows that in March 2021 the country received $204.82 million external inflows from multiple financing sources including $10 million from foreign commercial banks.

In the corresponding period (July-March) of fiscal year 2019-20 the external inflows were $6.730 billion which were around (52 percent) of the annual budgeted amount of $12.958 billion.

The total receipt of $7.413 billion constitutes $1.349 billion or 18 percent programme/budgetary support assistance, $3.120 billion (42 percent) foreign commercial borrowing, $1.350 billion (20 percent) project assistance and $439 million (6 percent) commodity financing while $1 billion (14 percent) was received as safe deposits from China.

According to the data, the government procured $3.110 billion loans from foreign commercial banks during July-March 2020-21, including $34.62 million from Ajman Bank, $400 million from the Standard Chartered Bank (London), $815.11 million from Dubai Bank, $200 million were received from the consortium-led by Suisse AG, UBL, and ABL including $10 million in March, $370 million from Emirates NBD, and $1.3 billion from the ICBC, China.

The bilateral and multilateral development partners disbursed $3.294 billion during the period under review (July-March) against the budgetary allocation of $5.811 billion for fiscal year 2020-21. Amongst the multilateral development partners, Asian Development Bank provided $1.247 billion followed by World Bank’s $938 million against the budgetary allocation of $2.257 billion. While from bilateral sources, France, USA and China provided $34.8 million, $86.2 million and $147.5 million respectively.

According to the EAD data during the first seven months of current financial year total servicing of external public debt was $4.865 billion against the annual repayment estimates of $10.363 billion for the entire fiscal year with $4.004 billion principal repaid (82 percent of total external public debt servicing) and $862 million (18 percent) interest on the outstanding stock of external public debt.

During July-February 2020-21, the government settled $2.429 billion foreign commercial loans. Further the government has repaid $1.998 billion to multilateral and $179 million to bilateral development partners.

For the period July- January, 2020-21, net transfers to the government were $3.045 billion. Positive net transfers came mainly due to higher inflows from multilateral development partners and due to $1 billion time safe deposit from China. According to EAD, the stock of external loans which was obtained on market based instruments has increased by $876 million and the share of concessional external loans with longer maturity increased by $1.169 billion.

Copyright Business Recorder, 2021