In February 2025, Pakistan managed to secure $364.15 million in external financing, a sharp 45.6 per cent drop from the previous month but 9.5 per cent higher compared to February 2024, according to the Economic Affairs Division (EAD).
Despite this, the country has struggled to meet its financing goals. In the first eight months of the fiscal year (8MFY25), Pakistan obtained $4.65 billion in external financing, far below the annual target of $19.39 billion set for FY25. Last fiscal year, the government had hoped to secure $17.62 billion but was only able to gather $9.81 billion.
Of the $364.15 million received in February, $161.63 million came in the form of loans, while the remaining $14.57 million was received as grants. The government’s target for the year includes financing from various sources: $5.05 billion from multilateral and bilateral lenders, $1 billion through international bonds, $3.78 billion in foreign commercial loans, $5 billion in time deposits from Saudi Arabia, and $4 billion in safe deposits from China.
A closer look at the figures reveals that disbursements from bilateral and multilateral development partners reached $176.2 million in February and totalled $2.83 billion over the first eight months of FY25. Although these funds have provided some relief to the country’s foreign exchange reserves, they remain significantly lower than budget projections.
Multilateral financing accounted for $170.38 million in February and $2.5 billion during 8MFY25, while bilateral support amounted to just $5.82 million for the month and $334.96 million over the eight-month period.
Foreign commercial borrowing contributed $187.95 million in February and $1.31 billion over the same period, primarily through the Naya Pakistan Certificate initiative. However, the government failed to secure any funds from foreign commercial banks, falling short of the $3.78 billion target set for FY25.
Significantly, out of the total financing for February, $210.54 million was allocated for non-project aid, primarily in the form of program and budgetary support to assist Pakistan in restructuring its economy. Over the eight-month period, non-project aid loans totalled $2.75 billion.
As the fiscal year progresses, Pakistan faces mounting pressure to secure additional funding to meet its ambitious targets.
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