The government has received $2.734 billion as total external inflows from multiple financing sources in the first quarter (July-September) of the fiscal year 2021, based on the data released by the Economic Affairs Division (EAD).
This includes $149 million from foreign commercial banks. This amount makes up for 22 percent of annual budget estimates of $12.233 billion for the entire fiscal year 2020-2021.
EAD stated that in the corresponding period of the fiscal year 2019-2020 the external inflows were $2.180 billion, which were around (17 percent) of the annual budgeted amount of $12.958 billion.
In the aftermath of Covid-19 and its persistence in the country, the disbursements of project financing from development partners dried up during the last quarter of the outgoing fiscal year 2019-2020 (April-June 2020). The pandemic has slowed down most of the economic activities across the country including development project activities.
However, after the ease in the lockdown by the government the economic activity is reviving which may lead to an increase in project financing in the current fiscal year 2020-2021, the EAD added.
The total receipts of $2.734 billion constitute $1.268 billion (46 percent) as program/budgetary support assistance; $149 million (5 percent) as foreign commercial borrowing; $317 million (12 percent) as project assistance to finance its development projects activities; and $1 billion received in terms of time safe deposits.
According to the EAD data, the government did not procure loans from foreign commercial banks in September 2020. However, $149 million were borrowed in July-August from foreign commercial banks. Pakistan also received $34.62 million from Ajman Bank in August, while $14.71 million from Standard Chartered Bank (London) and $100 million from the consortium-led by Suisse AG, United Bank Limited (UBL), and Allied Bank Limited (ABL) were received in July 2020.
The data also reflects the $1 billion of safe China deposit.
The bilateral and multilateral development partners have disbursed $1.585 billion of foreign economic assistance during July-September of the ongoing fiscal year (2020-21) against the budgetary allocation of $5.811 billion for the fiscal year 2020-21.
Among the multilateral development partners, mainly Asian Development Bank (ADB) provided $637 million, the World Bank (WB) disbursed $592 million against the budgetary allocation of $2.257 billion, while from bilateral sources, France, the USA, and the UK provided $25.3 million, $52.3 million, and $13.4 million respectively.
The EAD data further reveals that during July-August 2020 total servicing of external public debt was $798 million against the annual repayment estimates of $10.363 billion for the entire fiscal year, which Pakistan has requested for deferment due to the Covid-19.
In July-August 2020-2021, the government paid $204 million of interest on foreign commercial loans. Further, the government has also paid interest of $493 million to multilateral and $102 million to bilateral development partners on loans as actual repayment has been deferred by Western countries. For the period July-August 2020-2021, net transfers to the government were $1,004 million.