External inflows grow 45pc to $4.5bln in July-Nov

ISLAMABAD: External inflows in Pakistan grew 45 percent year-on-year to $4.5 billion during the first five months of the current fiscal year of 2020/21, ministry of economic affairs said on Thursday.

Total external inflows amounted to $3.1 billion during the corresponding period last year.

The government expected external inflows to keep the positive momentum and help the government maintain external account stability, according to the ministry of economic affairs.

“External inflows are showing strong performance despite challenges posed by the second wave of COVID-19 and depressed economic conditions in many regions globally,” it said.

Disbursement from multilateral and bilateral development partners amounted to $1.9 billion during the period under review.

“The strong official inflows during the first five-months of current fiscal year not only helped the government to discharge its external public debt obligation of $2.9 billion but also improved foreign exchange reserves and exchange rate stability,” said the ministry.

Government signed new agreements worth $10.4 billion with various development partners and foreign banks in FY2020 compared to $8.4 billion in FY2019, registering growth of 23.8 percent. Under the new agreements, the development partners are likely to disburse the committed amount in the next five to six years.

“These commitments are helpful to support socioeconomic development projects, economic reforms and balance of payments,” said the ministry. During FY2020, an amount of $ 10.7 billion was disbursed by multilateral and bilateral development partners and foreign banks. More than two-third of the total disbursement was from multilateral and bilateral development partners such as Asian Development Bank, World Bank, Asian Infrastructure Investment Bank, China, Saudi Arabia and UK.

“Increased level of external inflows from multilateral and bilateral development partners is indicative of their confidence in development priorities and policies of the government including implementation of reforms in the priority areas of fiscal and debt management, energy sector and ease of doing business,” said the ministry of economic affairs. “New external commitments have longer maturity period and concessional terms which is a reflection of robust composition of our external inflows and debt profile.” Composition of external public debt has improved as share of concessional external loans with longer maturity increased by $3.87 billion while the share of market-based instruments has declined by $2.06 billion. The government also paid an amount of $10.4 billion during the FY2020 on account of debt servicing of external public debt including principal amount of $8.5 billion and interest payment of $1.9 billion.