ISLAMABAD: The government has signed new loan agreements worth $3.904 billion with development partners during the first half (July-December) of the current fiscal year, i.e., 46 percent of the commitments of the corresponding period of last year, says the Economic Affairs Division (EAD).

The official data revealed that out of the total new agreements, $3.695 billion worth of financing agreements were signed with multilateral development partners, $200 million with foreign commercial banks, and $9 million with bilateral partners.

Among the multilateral development partners, the Asian Development Bank (ADB) emerged as the largest partner in terms of new commitments of FEA of $1.793 billion (46 percent of total commitments) followed by the IDA ($1.107 billion).

During 1st half (July-December) of 2022-23, out of the total commitments of $3.905 billion, an amount of $2.200 billion (or 56 percent of the total commitments) was earmarked as budgetary support, arranged through the ADB, the AIIB, and Bank of China, for easing out financial constraints on the foreign reserves side. An amount of $161 million (or four percent of the total) was allocated for commodity financing and 40 percent of the total commitments to project financing. However, no programme financing was committed during the period under review.

During the period July-December, 2022-23, disbursements amounting to $5.847 billion were mainly received in the shape of projects and programs loans/ grants from multilateral, bilateral development partners and financial institutions. The composition of disbursements is as follows: a) USD 1,166 million or 20 per cent of total disbursements were received from International Monetary Fund; b) USD 3,350 million or 57 per cent of total disbursements were from multilateral development partners, mainly from ADB, World Bank, and AIIB; and c) USD 736 million or 13 per cent of the total disbursement were from bilateral development partners; mainly from Saudi Arabia; and d) USD 395 million were received under Naya Pakistan Certificates (NPC) and USD 200 from a foreign commercial bank.

The ADB disbursed USD 1,905 million (33 per cent of the total disbursements), World Bank disbursed USD 698 million (12 per cent of the total disbursements – disaggregated as USD 293 million for program financing and USD 405 million for project financing).

Similarly, Saudi Arabia disbursed USD 600 million followed by AIIB (USD 521 million).

The other category includes disbursements from the EU (USD 13 million); IFAD (USD 35 million); France (USD 21.44 million); Germany (USD 5 million); Japan (USD21 million), Korea (USD 19 million), Oman (USD 2 million), and USA (USD 14 million).

As of 31st December 2022, Pakistan’s total external public debt stood at USD 86.56 billion.

Around 74 per cent (i.e. USD 64 billion) of the total external public debt was from multilateral and bilateral development partners including IMF, having concessional terms and longer maturity, 17 per cent (i.e. USD 14.6 billion) from international capital markets and foreign commercial banks, and eight per cent (i.e. USD 7.0 billion) of the total external public debt constitutes deposits from friendly countries (China and Saudi Arabia).

The government paid an amount of USD 8,258 million during the period July–December 2022 on account of debt servicing of external public loans. This consists of principal repayment of USD 6,902 million and interest payments of USD 1,355 million.

For the period under review, net transfers to the government’s external public debt were USD -1,450 million, whereas, it was USD 142 million in the first quarter of FY 2022-23.

Copyright Business Recorder, 2023