ISLAMABAD-Pakistan has borrowed $800 million from international lenders in the month of July due to the closed down of most of the economic activities across the country amid COVID-19 pandemic.
The country has received only seven per cent of the annual budgeted $12.23 billion for the entire fiscal year 2020-21. However, the borrowing amount of $800 million in July this year has higher than the amount $657 million borrowed in same month of previous year, according to the latest data of Economic Affairs Division (EAD). “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 2019-20,”  the EAD noted. It added that pandemic has closed 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 might lead to jack-up the project financing in the fiscal year 2020-21.
The breakup of $800 million showed that government has borrowed $585 million as budgetary support, $115 million (13 per cent) as foreign commercial borrowing to repay maturing international Sukuk and other foreign commercial loans; and $100 million (14 per cent) as project assistance to finance its development projects activities for improving the socio-economic development of the country and for asset creation.
The bilateral and multilateral development Partners have disbursed $685 million of foreign economic assistance during July of current fiscal year 2020-21 against the budgetary allocation of $5.811 billion. Amongst the multilateral development partners, mainly Asian Development Bank provided $131million. World Bank disbursed $528 million against the budgetary allocation of $2,257 million. While from bilateral sources, France and USA provided $23 million & $1million respectively. Pakistan’s debt is continuously increasing due to the massive borrowing from external as well as internal sources.
The data of ministry of finance showed that the country’s total public debt has been increased Rs36.3 trillion by the end of June 2020 with Rs23.2 trillion domestic debt and Rs13.1 trillion external debt. According to the latest data compiled by ministry of finance, Pakistan’s total public debt has enhanced to Rs36.3 trillion, which is 87 per cent of the GDP, by the end of previous fiscal year. The debt is increasing continuously according to the data. The public debt was at Rs6.1 trillion in 2007-08, Rs14.3 trillion in 2012-13, Rs25 trillion in 2017-18 and surged to Rs36.3 trillion in 2019-20. The public debt had increased by Rs8.2 trillion in PPP tenure from 2009 to 2013 and Rs10.7 trillion in PML-N tenure from 2013 to 2018. However, it went up by Rs11.3 trillion in two years of the incumbent government. However, the officials said that exchange rate depreciation added Rs3.5 trillion to the public debt and debt servicing Rs4.7 trillion to the total debt during the last two years. This led to the change in public debt to Rs11.3 trillion in the last two years.