Inflow of foreign loans surges in first quarter

Pakistan’s foreign assistance inflows rose by about 58 per cent in the first quarter of the current fiscal year. In its monthly report on Foreign Economic Assistance (FEA), the Economic Affairs Division (EAD) on Monday said against its annual target of $17.6bn, total FEA in the July-September quarter amounted to $3.527bn when compared to just $2.234bn of the same period last year, an increase of 58pc. Total inflows recorded by the EAD in September came in at $321 million against $316m in August. Major FEA during the first quarter flowed in at $2.89bn in July soon after Pakistan reached an agreement with the International Monetary Fund (IMF) for a fresh short-term programme. This FEA is in addition to $1.2bn released by the IMF on July 13 as the first tranche of the $3bn Stand-By Arrangement (SBA) and $1bn by the United Arab Emirates that are separately accounted for by the State Bank of Pakistan (SBP). The bulk — $2bn — of foreign loans reported by the EAD came from Saudi Arabia as a time deposit followed by a $508m guaranteed loan to Pakistan Air Force (PAF) by China National Aero-Technology Import & Export Corporation (CATIC). Of the remaining inflows included $490.48m from multilateral agencies and $324m from bilateral lenders. Another $204.5m flowed in from overseas Pakistanis in Naya Pakistan Certificates (NPCs). The government has estimated about $17.62bn in foreign assistance in the budget for the current fiscal year, including $17.385bn in loans and the remaining $235m in grants. As such, total loan disbursements in the first three months stood at $3.49bn and $34m in grants.