Loan inflows nearly double in two months

ISLAMABAD: Foreign assistance inflows to Pakistan almost doubled to $1.377 billion in the first two months (July-August) of the current fiscal year, mainly because of an ongoing umbrella of the International Monetary Fund (IMF).

This helped the government to start the new fiscal year on a healthy note, unlike last year’s lacklustre beginning in the absence of IMF support.

The total inflows, both loans and grants, in the first two months of the current fiscal year amounted to $1.377bn when compared to $714m last year, showing an increase of 93pc. Inflows in August alone amounted to $680m, almost 152pc higher than last year’s $270m in the same month. In July this year, a total of $698m loans and grants flowed into the country compared to $444m in the same month last year, representing a 57pc increase.

The $1.345bn in foreign loans and $33m in grants in the first two months of the fiscal year flowing into the country were about 103pc higher and 31pc lower than last year’s $662m loans and $43m grants, respectively, as finalisation of the Extended Fund Facility with the IMF was taking time and later materialized after the budget approval.

Boost from IMF support helps Pakistan secure $1.345bn in loans and $33m in grants

The target for total foreign inflows for the current year has been set at $19.9bn compared to $19.4bn last year.

In July-August 2023, Pakistan was able to materialise more than $3.2bn mainly due to signing of the 9-month Stand-By Agreement (SBA) with the IMF. As a result, Pakistan received a major injection of $2bn in time deposits from Saudi Arabia. In fact, total inflows in July 2023 amounted to $5.1bn, which also included $1.2bn from the IMF and an$1bn from the UAE.

The Ministry of Economic Affairs on Thursday said that it had received a total of $1.377bn in foreign inflows in the first two months of FY26 compared to $714m in the same period last year.

The EAD said that out of $1.377bn inflows, the 465.4bn were received for project financing compared to $441m in first two months of last year, showing a nominal increase of almost 6pc. The non-project loans amounted to $912m in two months compared to $272m last year, showing a massive growth of almost 235pc.

This meant about $680m loans were received in two months for budget support compared to just $272m in the same period last year, showing an about 150pc increase in inflows for budget financing. This is despite the fact that the annual target for budget support this year was set at $13.5bn compared to $15bn last year.

The authorities were also able to materialise $200m against the Saudi oil facility in the first two months, at a rate of $100m each month, for the fiscal year, against an annual target of $1bn.

Against a full-year target of $5bn from multilaterals (excluding IMF), Pakistan got $780m in two months from multilateral lenders against $293m of the same period last year, when the annual target was $4.5bn.

Total inflows from bilateral lenders (excluding three strategic and friendly countries) in the first two months of the year totalled $232m, against an annual target of $1.36bn. This was 43pc higher than the $162m recorded in the same period last year, when the full-year target was $523m.

Total inflows from bilateral and multilateral lenders amounted to $1.013m in two months of this year against the annual target of $6.4bn. Last year, the government secured $456m from bilateral and multilateral sources against the annual target of $5.05bn.

Inflows from overseas Pakistanis increased to $365m in the first two months of the current year in the shape of Naya Pakistan Certificates, up from $259m last year. The government has estimated a total of $609m through these certificates during the current year.

The full year $19.9bn target for the current fiscal year includes $6.4bn from both multilateral and bilateral lenders, including $5.05bn from multilaterals and $1.36bn from bilateral lenders, $400m in international bonds, $3.1bn foreign commercial loans, $5bn time deposit from Saudi Arabia and $4bn SAFE deposit from China.

Published in Brackly News, September 26th, 2025