Thursday April 25, 2024

$7.8bn received in foreign assistance in current fiscal year: EAD

Multilaterals provide $4.02 billion while other countries give $1.06 billion

By Ashraf Malkham
April 21, 2023
A currency dealer counts US banknotes in this undated file photo. — AFP
A currency dealer counts US banknotes in this undated file photo. — AFP

A report from the Economic Affairs Division (EAD) showed that Pakistan has received $7.76 billion so far in foreign economic assistance — which includes both grants and loans — in the current fiscal year as the country tries to deal with its balance of payment crisis.

Of the total amount, $4.02 billion has been received from multilaterals, including the Asian Development Bank (ADB) and the European Union, while $1.06 billion has been given by other countries. 

According to the breakdown given in the "Disbursement Report March 2022", the International Monetary Fund (IMF) has given $1.17 billion to Pakistan so far.

Separately, the ADB has given $1.94 billion and the International Development Association — a member of the World Bank — has provided $1.1 billion. Meanwhile, the Asian Infrastructure Development Bank has given $546.75 million.

Among friendly countries, Saudi Arabia has provided the highest amount of foreign assistance — $100 million — besides an oil facility of $782.28 million.

China has provided $54.93 million, followed by Japan at $34.19, France at $28.97 million and the United States at $24.27 million.

The report also said the government received $900 million in loans from commercial banks and $612.3 million through Naya Pakistan Certificates.

Pakistan's foreign exchange reserves have depleted sharply during the current fiscal year and stand at $4.43 billion as of April 14, which will provide an import cover of less than a month — a position that has been the same for several months now.

The country's $350 billion economy continues to dwindle amid financial woes and the delay in an agreement with the IMF that would release much-needed funding crucial to avoid the risk of default.

The government has been in talks with the Washington-based lender since end-January to resume the $1.1 billion loan tranche that has been on hold since November, part of a $6.5 billion Extended Fund Facility (EFF) agreed upon in 2019.

The country is getting closer to securing the loan as it has shared a plan with the IMF for securing an additional $3 billion to bridge the financing gap.

A deal with the IMF will also unlock other bilateral and multilateral financing avenues for Pakistan to shore up its foreign exchange reserves.