The government received $6.7 billion in gross foreign loans in the first seven months of the current fiscal year (7MFY21), including a new commercial loan of $500 million from China last month, which helped Islamabad keep its gross official foreign exchange reserves at current levels.
According to a statement by the Ministry of Economic Affairs, the government during (July-January) period of FY21 obtained $6.7 billion in external loans from multiple financing sources. The gross loans were higher by 6pc or $380 million over the same period of last fiscal year.
The statement added that out of the $6.7 billion, an amount of $2.7 billion or 41 per cent of the total loans was on account of foreign commercial loans.
According to a local media report, the government also signed a new agreement worth $1.1 billion on Wednesday with the Islamic Development Bank (IDB). Total inflows in seven months were equal to 54pc of the annual budget estimate of $12.2 billion for the current fiscal year.
Nearly 87pc of the foreign loans or $5.8 billion were for budget financing, building foreign exchange reserves and commodity financing.
The country would be paying back those loans after taking new loans as no revenue-generating assets were created by using the loans. Project financing was a mere $897 million or 13pc.
The economic affairs ministry said that Pakistan repaid $2.7 billion worth of foreign debt in six months, suggesting that net addition to the external public debt in the six-month period was $4 billion.
