Cash-strapped Pakistan’s external public debt sharply rose by $1.2 billion in six months to $86.358 billion as of September 30, 2023, with the World Bank and China emerging as the largest multilateral and bilateral contributors to total disbursement, a government report has said.
Pakistan received total foreign inflows of $3.5 billion in July-September 2023 against loan repayments of $1.5 billion, resulting in a net inflow of $1.97 billion.
As of September 30, 2023, the total external public debt of the government was $86.358 billion,” the first quarterly report on Foreign Economic Assistance (FEA) of the current fiscal year released on Wednesday by the Ministry of Economic Affairs (MEA) said.
Around 64 per cent of the total external public debt was obtained from multilateral and bilateral sources having concessional terms and longer maturity, according to a report in newspaper The Dawn that quoted the MEA.
The external public debt as of March 31, 2023, amounted to $85.18 billion. In comparison, the country had received $2.2 billion in loans and repaid $2.06 billion during the same period last fiscal year (July-September 2022), leading to a net addition of $142 million.
The report also said Pakistan had signed new agreements worth $642 million in fresh commitments during the first quarter of the year and all new commitments had been funded by multilateral development partners.
International bonds and commercial loans could not be secured because of adverse market conditions following poor credit rating and resultantly unaffordable interest rates, it said.
This $3.538 billion FEA is in addition to $1.2 billion released by the International Monetary Fund (IMF) on July 13 as the first tranche of the $3 billion Stand-By Arrangement (SBA) and $1 billion by the United Arab Emirates that are separately accounted for by the State Bank of Pakistan.
The World Bank ($306 million) and Islamic Development Bank ($100 million) were amongst the largest contributors among multilateral development partners while on the bilateral side, China emerged as the primary contributor to the total disbursements during the period disbursing $509m, followed by $300m from Saudi Arabia for import of oil and petroleum products.
During the first quarter (July-Sept 2023-24), the disbursed amount is in the shape of programme financing, project financing, commodity financing, and budgetary support helped the government support economic reforms, execute development activities and provide support to its balance of payments position, the report said, adding that a significant share, i.e. 64 per cent of the total external public debt, was secured on concessional terms with extended maturities.
Giving a sectoral breakdown, the MEA said the share of disbursements under floods stood at $101 million, followed by $64 million for energy and power, $52 million for the water sector, $34 million for transport and communication, $29 million for health and nutrition, $25 million for agriculture and $22 million for physical planning and housing in the total project assistance, reported the Dawn newspaper.
