Foreign loans to Pakistan dropped over 55% in the first four months of FY25. From July to October, the country received $2.7 billion, compared to $6.05 billion last year. Delays in IMF disbursements caused lending partners to hold back funds.
The Economic Affairs Division (EAD) reported inflows of $1.72 billion, excluding $1 billion from the IMF in September. Including IMF funds, total inflows reached $2.72 billion, far below the $19.4 billion target. Last year, inflows during the same period hit $3.85 billion against a $17.6 billion goal.
Key Loan Breakdown
Budgetary support loans contributed $897 million. Project financing added $826 million. In comparison, project aid last year totaled $992 million, while program loans reached $2.53 billion.
Multilateral inflows rose to $721 million from $597 million. The World Bank contributed $364 million, followed by the Asian Development Bank and the Islamic Development Bank. However, bilateral aid fell to $260 million from $436 million. China provided $97 million, France $90 million, and the U.S. $38 million.
Commercial Loans and Pending Deposits
Commercial loans improved slightly to $200 million but missed the $3.8 billion target. Saudi Arabia’s $5 billion deposits and China’s $4 billion SAFE deposits remain delayed. These funds are critical to filling Pakistan’s financing gap.
Moreover, Naya Pakistan Certificates brought in $542 million. Still, this amount is insufficient to meet financial demands.
Path Forward
Pakistan must regain lender trust by meeting IMF conditions. Without swift action, its financial struggles will worsen. For stability, the government should focus on reforms and diversify revenue sources.
