Pakistan struggles to secure loans from global lenders

Pakistan government faced difficulties in obtaining funds from international partners and lenders during the first three quarters

Islamabad: The Pakistan government faced difficulties in obtaining funds from international partners and lenders during the first three quarters of the current financial year, mainly because of unresolved issues with the International Monetary Fund (IMF), a media report said.

According to statistics issued by the Economic Affairs Division, the country received foreign loans worth $7.76 billion during July-March of fiscal 2022-23 (July 2022-June 2023), which is nearly $5 billion short of the $12.7 billion it received in the same period of the previous fiscal, The Express Tribune reported.

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The fall is attributed to non-renewal of the IMF programme, according to sources. Because of the delay in finalising the deal with the global lender, Pakistan faced difficulties in obtaining international loans, they said, The Express Tribune reported.

According to the Economic Affairs Division’s monthly report on loans, the country received $4.2 billion in loans from the international financial institutions in the first nine months of the fiscal year. This includes $358.7 million received in March.

The government expected to receive a total $22 billion dollars in foreign loans this fiscal year. However, the amount received so far is one-third of the expected funds, with only three months remaining in the fiscal year, The Express Tribune reported.

The Economic Affairs Division’s report stated that the Asian Development Bank (ADB) provided a loan of $1.94 billion, the World Bank gave a loan of over $1.1 billion and the IMF provided more than $1.16 billion.

Besides, according to the report, Saudi Arabia has been the major contributor to Pakistan’s borrowing. Riyadh gave a loan of over $880 million, another $780 million for oil facility and $100 million in project financing to Islamabad, the report said.

It said that Pakistan received a loan of $900 million from commercial banks, while more than $610 million were raised through the Naya Pakistan Certificate, The Express Tribune reported.