Pakistan’s Ministry of Economic Affairs said on Monday that the government received $ 14.283 billion in foreign loans in fiscal year 2020-21, up from $ 10.66 billion in 2019-2020, an increase of 34 percent. Despite healthy remittances and higher exports, Pakistan’s total foreign lending exceeded the target of USD 12.233 billion set in the 2020-2021 budget by 17%, indicating higher foreign exchange requirements to finance imports. and past loans, Dawn reported.
Most of the $ 8.2 billion was guaranteed by non-traditional multilateral and bilateral lenders, although Saudi Arabia’s targeted $ 1 billion lending failed to materialize during the year. . The gap was bridged by securing a Chinese loan of an equivalent amount that was not part of the original budget estimates, Dawn reported. In addition, the government has secured $ 2.5 billion through international bonds against a budget target of $ 1.5 billion. These include US $ 1 billion Eurobonds with a 10-year term, US $ 500 million with a 30-year term and US $ 1 billion for a five-year bond due. in 2026.
On top of that, the government also secured $ 4.7 billion in commercial loans from international banks against a budget target of $ 3.9 billion. All of these commercial loans were arranged for budget support and included $ 200 million each of the four loans from Standard Chartered Bank London, $ 275 million from Switzerland AG-UBL, $ 400 million from Ajman Bank, $ 825 million from Dubai Bank, $ 370 million from Emirates NBD, $ 1 billion (two loans of $ 500 million each) from the Industrial and Commercial Bank of China (ICBC) and $ 2 billion (two loans of $ 1 billion each) from the Chinese government and the Development Bank of China, Dawn reported.
The government missed its multilateral lending budget target of nearly $ 1 billion due to lower disbursements from the Asian Development Bank (AfDB), the Asian Infrastructure Investment Bank (AIIB), the Islamic Development Bank, the World Bank Group, etc. 4.37 billion in fiscal year 21 against budget estimates of 5.354 billion dollars. These loans do not include $ 500 million disbursed by the International Monetary Fund (IMF) in April 2021 which is accounted for separately in the accounts of the central bank.
Disbursements below the targets of multilaterals – ADB, World Bank and AIIB – and the resulting higher borrowing from commercial banks and bonds forced Pakistan to swallow significantly higher interest rates, Dawn reported. Ministry data showed that the amount of foreign loans has grown steadily over the past three fiscal years, from $ 10.59 billion in FY19 to $ 10.662 billion in FY20, then to reach $ 14.28 billion in fiscal year 21 despite a favorable current account situation supported by strong remittances from abroad. Pakistani. (ANI)
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