Pakistan witnessed a monumental increase in foreign financing by surpassing $5.41 billion during the initial two months (July-August) of the current fiscal year 2023-24, compared to a mere $439 million during the same period last year.
The driving forces behind this extraordinary leap were the International Monetary Fund (IMF) stimulus and strategically crafted bilateral agreements.
In its monthly Foreign Economic Assistance (FEA) report, the Economic Affairs Division (EAD) revealed that July and August together saw a staggering 630 percent surge in total FEA, reaching $3.2 billion.
Saudi Arabia extended a pivotal $2 billion as a time deposit, while the China National Aero-Technology Import and Export Corporation provided a $508 million guaranteed loan to the Pakistan Air Force. Additionally, multilateral agencies channeled $336 million, bilateral lenders committed $221 million, and overseas Pakistanis contributed $141 million through Naya Pakistan Certificates.
The IMF played a pivotal role in fortifying Pakistan’s financial stability by disbursing $1.2 billion on July 13 as the inaugural tranche of a $3 billion Standby Arrangement. Simultaneously, the United Arab Emirates (UAE) bolstered the nation’s financial footing by separately providing $1 billion, funneled through the State Bank of Pakistan.
Multilateral institutions emerged as key financial supporters, with the World Bank leading the way, providing $178 million in loans during the initial two months of the current fiscal year.
Other significant contributors included the Islamic Development Bank ($87 million), the Asian Development Bank ($39 million), the Asian Infrastructure Investment Bank ($16 million), and the International Fund for Agricultural Development ($6 million), while the United States contributed approximately $12 million.
This can boost Pakistan GDP.