Foreign loan disbursements to Pakistan have fallen significantly, dropping by 43% to $3.6 billion in the first five months of the current fiscal year, according to official statistics released on Monday. The slowdown in releases has raised concerns about the country’s ability to meet its external financing needs. In the same period last year, Pakistan received $6.4 billion, highlighting the scale of the drop this year.
The Ministry of Economic Affairs and the State Bank of Pakistan reported that bilateral and multilateral creditors disbursed less than $2.6 billion from July to November 2024, excluding the IMF’s contribution. Including the IMF’s first loan tranche, the total disbursement reached $3.6 billion, $2.8 billion less than the same period last year. Saudi Arabia and the UAE had previously provided significant financial support, but those contributions have not been replicated this year.
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Pakistan faces mounting pressure with upcoming debt maturities. The country needs to repay $16.5 billion, including $12.7 billion in cash deposits and $3.8 billion in Chinese commercial loans, while its gross foreign exchange reserves are just $12 billion. The government has projected inflows of $24 billion in new loans and rollovers, but actual disbursements have so far reached only 15% of that target.
The World Bank has indicated that it will not provide any new budget support loans to Pakistan this fiscal year, and project funding is progressing slowly. Saudi Arabia has yet to approve a $1.2 billion oil facility, further complicating Pakistan’s efforts to secure external financing. While multilateral creditors like the Asian Development Bank have increased their support, the overall disbursement figures remain far below expectations, casting doubt on the government’s financial stability plans.
