Pakistan borrowed over $12 billion during the 11 months of the current fiscal year (11MFY21) – an increase of about 63 per cent compared to the same period in FY20.
According to a report by Dawn based on the monthly data for May issued by the Ministry of Economic Affairs, unlike previous year, the government borrowed heavily during FY21 to maintain its improved foreign exchange reserves.
During July-May FY21, the government borrowed $12.13bn compared to $7.44bn in the same period in previous fiscal year, recording an increase of $4.68bn or 62.8pc.
However, about half of the loans were borrowed as commercial loans which mean the interest would be much higher than the loans received from the Asian Development Bank (ADB), World Bank and Islamic Development Bank (IDB).
The data shows that inflow of loans during the month May was around $699.7m. However, the government remained close to its target set in the budget for grants and loans.
The budget shows the inflow of grants for FY21 as $275.8m while the 11MFY21 inflow reached at $231.6m. Similarly, the loans estimate in budget was $11.96bn while it reached at $11.90bn during this period.
