ISLAMABAD -  Pakistan has taken $4.6 billion fresh foreign loans in last seven months for meeting its budget financing and maintaining its foreign exchange reserves.

The country has received loans of $4.6 billion as foreign economic assistance from multilateral and bilateral sources during seven months (July-January) of the ongoing financial year. The loans received is 57 percent of the annual economic assistance of $8 billion that the government has projected to receive during the current fiscal year 2016-17.

Pakistan had obtained $440.9 million loan in January that included $300 million from the commercial banks. Due to the massive borrowing, Pakistan’s total external debt and liabilities ballooned to $74.6 billion. The break-up shows that the external debt rose to $58.7 billion. The total public debt stood at Rs20.6 trillion by the end of Sept 2016, an increase of Rs3.15 trillion since June 2015.

The government’s payment on interest has increased due to the massive borrowing, as it had earmarked Rs1,360 billion in annual budget for paying interest during fiscal year starting from July 2016 to June 2017. Two major components of the loans of $4.6 billion were issuance of Sukuk bond worth of $1 billion and $1.2 billion borrowing from the commercial banks. The government had taken these loans to bridge its budget deficit and building the country’s foreign exchange reserves, which had currently come down to $21.9 billion from historic level of $24 billion. Meanwhile, the reserves would come further under pressure in near future, as Pakistan would repay $6.5 billion external debt in the next 15 months.

In the budge 2016-17, the government had estimated to generate $1.75 billion from issuance of bonds in international market. Therefore, it could issue another bond to build its reserves.

Pakistan had borrowed $857.4 million from China in the first seven months of current fiscal year, which is higher than the Chinese commitment of $572.3 million. The Asian Development Bank (ADB) has given $709.75 million against the budgeted estimates of $1048.2 million.

Similarly, Pakistan has received loan worth of $212.4 million from IDB (S-Term), $144.2 million from International Bank for Reconstruction and Development (IBRD), $131.8 million from International Development Association (IDA), $131.67 million from UK, $30.15 million from IDB and $42.8 million from Japan in the seven months of the ongoing fiscal year.

The government received no assistance from EU, France, Korea, Norway, Oman, Saudi Arabia, UNDP and Organisation of the Petroleum Exporting Countries (Opec) during the period under review.