ISLAMABAD: When the financial year 2022-23 started, the economic situation that Pakistan was going through was not ideal. A new government had just taken over and the IMF programme had been sabotaged due to a politically motivated fuel subsidy. But if things were bad back in June 2022, they have only gotten worse since.
In hopes of meeting Pakistan’s debt repayment requirements and fulfilling the country’s fiscal needs, the Federal government led by Prime Minister Shehbaz Sharif set a total target of $22.81 billion, in external financing during the first ten months (July-April) of the current fiscal year. However, as per the latest calculations Pakistan was able to secure only $8.12 billion in external financing, due to suspension of the International Monetary Fund (IMF) loan programme.
The information was made public in a monthly bulletin of external loans and grants, issued by the Ministry of Economic Affairs Division (EAD).
According to the report, the federal government has obtained $358.6 million during the last month (April 2023) from different external sources. After this loan and grants, the government has secured $8.12 billion total external loans during the ten months of the current fiscal year.
The government on April 23 has obtained $100 million from Saudi Arabia through oil facilities on deferred payments, $ 72.96 million from China, $70.47 million from the World Bank through the IDA program, $64.93 million through Naya Pakistan Certificates, and $35.20 million from Asian Development Bank.
It is pertinent to mention here that Shehbaz Sharif Govt had projected $22.81 billion external financing needs for the current fiscal year.
The data shows that the government had also projected $7,472 billion external financing from commercial banks but it could only secure $900 million in ten months.
The government had also estimated to get $2.0 billion through floating bonds in the international market, however, it could not float bonds in the international market mainly due to negative ratings from different international rating agencies. The ratings were not helped by the suspension of the IMF program from Oct 2022.
Even though the government has only obtained $1.16 billion against the total estimated amount of $3 billion from the IMF. The total impact of this deal not going through has a far greater overarching impact than just the $1.8 billion. A number of multilateral and bilateral loans remain unofficially dependent upon the fund’s seal of approval for Pakistan. It is pertinent to mention here that the government could only complete one review meeting with the IMF and the ninth review meeting is still pending, due to endless demands of the fund.
Pakistan has obtained $4.13 billion from multilateral sources in ten months against the total estimated amount of $7.67 billion for the current fiscal year.
The country has received $5.38 billion in ten months against the total estimated amount of $8.71 billion for the current fiscal year.
