Pakistan facing 60pc shortfall in disbursements from lenders

ISLAMABAD: Amid inability of the PTI government to launch any international bonds and persistent suspension of budgetary loans from lenders, the disbursement from multilateral and bilateral creditors has slashed by 60 percent in the first seven months (July-Jan) of the current fiscal year.

Without calculating $4 billion deposits received from Saudi Arabia and UAE so far out of total commitment of $6 billion which is lying with the State Bank of Pakistan (SBP) meant for only jacking up the foreign currency reserves level, the federal government’s released data showed the total disbursement from multilateral and bilateral creditors in shape of loans and grants stood at just $2.705 billion in July-Jan period of 2018-19 against $6.882 billion in the same period of the last financial year 2017-18, indicating a decline of $4.177 billion in absolute figures or almost 60 percent reduction in received dollar inflows during the ongoing financial year.

The government has envisaged getting disbursement of loans and grants to the tune of $9.691 billion in the ongoing fiscal year and after passing seven months it could only materialise $2.7 billion, almost equivalent to 27 percent out of total desired target. In a positive development, the disbursement from China even crossed budgetary estimates for whole financial year 2018-19 as Beijing so far provided $1.123 billion in first seven months of the current fiscal against total budgetary estimates of $840.9 million. In the same period of the last financial year, China had disbursed $608.7 million in fiscal year 2017-18.

Pakistan had received $648.39 million in shape of programme loans and budgetary support in the first seven months of the current fiscal against $2.04 billion in the same period of the last fiscal year.

In a good move, the PTI-led government reduced its reliance on commercial borrowings as it stood at $499 million in first seven months of the ongoing financial year against $1.777 billion in the same period of the last financial year. The disbursement from Asian Development Bank (ADB) stood at $356.8 million in the first seven months of the current fiscal compared to $498.03 million in the same period of the last financial year. The AIIB disbursed $13.4 million so far in the current fiscal against $15.78 million last year. Canada disbursed $0.14 million in ongoing fiscal against $0.16 million in last year. The disbursement from the European Union (EU) did not figure in the current fiscal year.

The disbursement from France has significantly gone up to $41.83 million in the first 7 months of the current fiscal against $9.97 million in the same period of the previous financial year. Germany provided $13.32 million to Pakistan in the current fiscal year against $15.93 million in the same period of the last fiscal year. Pakistan received $18.95 million from IBRD, IDB (short term) $297.37 million, IFAD $16.06 million, $36.14 million from Japan, $12.98 million from MTDF, $19.4 million from Saudi Arabia, $74 million from UK and $48.14 from USA in first seven months of the current fiscal year.

When contacted, Secretary Economic Affairs Division Noor Ahmed on Thursday said he had given a commitment to the Minister for Finance for delivering on project lending target of $5.6 billion for the current financial year. The issuance of international bonds and obtaining commercial loans is the domain of the Finance Ministry but ensuring budgetary provision on project/programme lending is the responsibility of the Economic Affairs Division (EAD). The Secretary EAD said the Minister for Finance Asad Umar also took notice of slow pace of disbursement and has now started reviewing inflows figures on a monthly basis. He said the disbursement on account of project lending so far has materialised to the tune of $2.2 billion and they were committed to achieving the target of $5.6 billion till end June 2019. He said that the ECNEC and CDWP could not meet owing to political transition occurred in the country in the start of the ongoing fiscal year that resulted into slowing down of donor funded disbursements but now the pace of disbursement was picking up from last two months and it would be further accelerated in the remaining months of the ongoing financial year.