Foreign assistance inflows to Pakistan have exhibited substantial growth in the first quarter of the current fiscal year, increasing by approximately 58 percent compared to the same period in the previous year.
The Economic Affairs Division (EAD) reported in its monthly Foreign Economic Assistance (FEA) report that total FEA for July to September reached $3.527 billion, surpassing the previous year’s $2.234 billion.
This impressive rise in foreign assistance is in alignment with Pakistan’s annual target of $17.6 billion. A significant portion of this increase in FEA took place in July, immediately following Pakistan’s agreement with the International Monetary Fund (IMF) for a fresh short-term program, which brought in $2.89 billion. The total FEA for September was $321 million, a slight increase from $316 million in August.
The breakdown of the FEA reveals its diverse sources, with the majority ($2 billion) coming from Saudi Arabia as a time deposit. This was followed by a $508 million guaranteed loan to the Pakistan Air Force (PAF) from the China National Aero-Technology Import & Export Corporation (CATIC).
The remaining inflows included $490.48 million from multilateral agencies, $324 million from bilateral lenders, and $204.5 million from overseas Pakistanis through Naya Pakistan Certificates (NPCs). Additionally, the United Arab Emirates provided $1 billion as part of a separate arrangement with the State Bank of Pakistan (SBP).
This substantial increase in foreign assistance is crucial for Pakistan’s economic stability and growth. The government had estimated foreign assistance of about $17.62 billion in the current fiscal year’s budget, comprising $17.385 billion in loans and $235 million in grants.
The first three months of the fiscal year have witnessed loan disbursements of