Pakistan incurs $439mn of external debt in first two months of FY23: EAD

Pakistan received foreign disbursements to the tune of $439.32 million from multiple financing sources in the first two months (July-August 2022-23) of FY23 against the total budgeted external loans of $22.817 billion for the entire fiscal year.

The Economic Affairs Division (EAD) released a report on the monthly disbursement of foreign economic assistance for August on Friday, which shows that the country received $252.25 million from multiple financing sources in August 2022.

The government has budgeted estimates of foreign assistance of $22.817 billion for the current financial year, including $22.655 billion loans and $161.46 million grants from multilateral and bilateral sources.

Over $13bn debt incurred in 10 months: EAD

During the period (July-August 2022), no amount was borrowed from foreign commercial banks against the full-year budgeted amount of $7.472 billion.

Meanwhile, the total receipt of $439.32 million constitutes $206.25 million from multilateral, and $233.07 million from bilateral sources.

Non-project aid amounted to $243.01 million including $37.01 million for budgetary support and project aid was $196.31 million.

Among multilateral development partners, the Asian Development Bank provided $70.96 million against the government budgeted estimates of $3.202 billion for the current fiscal year, the International Development Association (IDA) disbursed $100.62 million against the government budgeted estimates of $1.388 billion in FY23, the AIIB $2.47 million, and Islamic Development Bank $8.85 million.

Among bilateral sources, China disbursed $4.90 million in the first two months (July-August) of the current fiscal year against the government budgeted estimates of $49.02 million, USA $8.3 million, Korea $15.65 million, France $3.21 million and Saudi Arabia $200 million in oil facility.

The International Monetary Fund (IMF) has projected Pakistan’s external debt to reach $140.959 billion in 2022-23 up from $130.127 billion in 2021-22.

The international lender projects the debt-to-GDP ratio to rise from 77.9% at end-fiscal year 2021 to 78.9% at end-fiscal year 2022 before falling to around 60% by end-fiscal year 2027, assuming the adjustment efforts in the context of the EFF programme are fully carried out.