Pakistan has managed to obtain $1.2 billion in new loans during the first half of the current fiscal year mainly against projects funding.
The country’s foreign loans increased 67% during July to December 2011 against $679 million received in the same period a year ago, according to documents from the Economic Affairs Division (EAD).
As much as 96% of the loans were disbursed against various projects. The government has targeted $3.7 billion from international lenders in fiscal 2012, of which $1.6 billion is for projects, of which almost 70% have been received.
An amount of $1.1 billion will be arranged under the budgetary head, however, only 4.5% of the annual target could be achieved in the first six months. Of the total inflows of $1.2 billion, the budgetary support was only $49 million.
Pakistan received $236 million from the WB in the first half of fiscal 2012, $143 million higher than the corresponding period of the last fiscal year. Similarly, ADB extended $237 million in the first half, which is $51 million more than the corresponding period of last financial year.
China gave $323 million fresh loans, an increase of $203 million or over the corresponding period. The Islamic Development Bank extended $73 million loans, showing a $59 million increase.
Net inflows in the first half excluding repayments were $384 million against net inflows of a negative $271 million a year ago, the official said. The authorities have managed to arrange entire payments of matured loans from external sources that neutralised their impact on foreign currency reserves held by State Bank of Pakistan.
However, the trend may not be sustainable as the government is set to payback $1.2 billion first tranche to the IMF before end of February.
Published in The Express Tribune, February 12th, 2012.
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