ISLAMABAD - The government is all set to breach the budgeted level of foreign borrowing for previous fiscal year 2020-21 due to the massive external loans to build its foreign exchange reserves of the country.

The country had received $12.14 billion as foreign loans from various international sources during eleven months (July to May) of the fiscal year 2020-21. The government had projected external loans of $12.233 billion for the entire fiscal year 2020-21. However, the government would breach the level of projected external loans as Pakistan had received loans from, China, World Bank and other financial institutions in last month (June).

Due to the massive loans, the country’s foreign reserves stood at $24.414 billion on 02-Jul-2021. Foreign reserves held by the State Bank of Pakistan are $17.231 billion and net foreign reserves held by commercial banks are $7.183 billion. “During the week ended 02-Jul-2021, SBP received $1,000 million as GOP loan disbursement from China and $440 million from World Bank. After accounting for external debt repayments and other official payments, SBP reserves increased by $1,112 million to $17,231.1 million,” said State Bank of Pakistan.

According to the latest data of ministry of Economic Affairs, Pakistan had received foreign debt of $12.135 billion from international financing sources during July-May period of 2020-21 against the total budgeted external loans of $12.233 billion for the entire fiscal year 2020-21. The public grants and loans stood at $10.896 billion during July-May 2020-21, while publicly guaranteed is $1.239 billion during the first eleven months of the current fiscal year. In the corresponding period (July-May) of fiscal year 2019-20, the external inflows were $7.451 billion, which were around (58 percent) of the annual budgeted amount of $12.958 billion.

Country had received $12.14 billion as foreign loans from various international sources during eleven months of last FY

The data shows that project aid remained $1.417 billion, while non-project aid was $9.478 billion during the first 11 months of current fiscal year. The government borrowed $3.609 billion from foreign commercial banks, $2.5 billion from bonds issuance, while $1 billion was received as safe deposits from China. The government has budgeted $1 billion under the head of Saudi oil facility, however, no amount was received during the current fiscal year so far.

One of the main sources of the foreign loans was the commercial borrowing, as the government had taken $3.609 billion loans from the foreign commercial banks during July-May 2020-21. Its breakup showed that country had received $323.62 million from Ajman Bank including $289 million, $600 million from the Standard Chartered Bank (London) including $73.67 million, $815.11 million from Dubai Bank, $200 million were received from the consortium-led by Suisse AG, UBL, and ABL, $370 million from Emirates NBD, and $1.3 billion from the ICBC, China.

Meanwhile, the documents showed that bilateral and multilateral development partners had provided $3.787 billion during the period July-May of the year 2020-21 against the budgetary allocation of $5.811 billion. Among the multilateral development partners, the Asian Development Bank provided $1.283 billion against the budgeted estimates of $1.470 billion followed by the World Bank’s $1.224 billion against the budgetary allocation of $2.257 billion and Asian Infrastructure Investment Bank (AIIB) $252 million.

While from bilateral sources, France, the USA, and China provided $39 million, $102 million, and $178 million, respectively.