ISLAMABAD: The country received $800 million total external inflows from multiple financing sources in the first month (July) of fiscal year 2020-21 including $115 million from foreign commercial banks, which is seven percent of annual budget estimates of $12.233 billion for the entire fiscal year.
According to the official data of Economic Affairs Division (EAD) the external inflows during the corresponding period of fiscal year 2019-20 were $657 million which were around five percent of the annual budgeted amount of $12.958 billion.
In the aftermath of Covid-19 and its persistence in the country the disbursements of project financing from development partners dried up during the last quarter of the outgoing fiscal year 2019-20. The pandemic led to closure of most economic activities across the country including development project activities. However, after the ease in the lockdown by the government economic activity is reviving which may lead to jacking-up project financing in the current fiscal year 2020-21, EAD added.
The government budgeted foreign assistance of $12.233 billion for the fiscal year 2020-21 including $3.922 billion from foreign commercial banks. According to EAD the total receipt of $800 million constitutes $585 million or 73 percent as program/budgetary support assistance; $115 million (13 percent) as foreign commercial borrowing and $100 million (14 percent) as project assistance to finance development projects activities.
The data reveals that government procured $115 million from foreign commercial banks in July 2020-21 against $173 million during the same period of last fiscal year. The country received $14.7 million from Standard Chartered Bank (London) and $100 million from the consortium-led by Suisse AG, UBL and ABL in July 2020.
The bilateral and multilateral development partners have disbursed $685 million assistance during the first month of fiscal year 2020-21 against the budgetary allocation of $5.811 billion for entire fiscal year 2020-21. Amongst the multilateral development partners, Asian Development Bank (ADB) provided $131 million. World Bank disbursed $528 million against the budgetary allocation of $2.257 billion. While from bilateral sources, France and USA provided $23 million and $1 million respectively.
EAD data further reveals that during July-June, 2019-20 total servicing of external public debt was $10.140 billion against the annual repayment estimates of $10.423 billion for the entire fiscal year. The government repaid $8.338 billion (82 percent of total external public debt servicing) was repaid as principal and $1.802 billion (18 percent) as interest on the outstanding stock of external public debt.
During 2019-20, the government settled $4.401 billion worth of foreign commercial loans and repaid $1 billion worth of Sukuk issued in December, 2014. Further, the government repaid $2.212 billion to multilateral and $725 million to bilateral development partners. For the period July-June, 2019-20, net transfers to the government were $1.211 billion.
Copyright Business Recorder, 2020