ISLAMABAD - Apart from borrowing from Saudi Arabia and United Arab Emirates, the incumbent government took loan of $9.76 billion from international creditors in eleven months (July to May) of the current fiscal year.

Pakistan’s borrowing from bilateral, multilateral and banking sources stood at $9.76 billion. However, this amount had not included $5 billion that Pakistan borrowed from Saudi Arabia and United Arab Emirates.

The incumbent government is taking loans to repay the loan taken by the previous governments and also on interest payment.

Pakistan’s public debt and liabilities are rapidly increasing as they touched Rs35.09 trillion by end-March 2019. Total public debt to GDP ratio further increased and recorded at 74.2 percent of GDP at end March 2019. Thus, these indictors remained significantly higher than the 60 percent threshold as envisaged under FRDL Act, 2005. Pakistan’s external debt and liabilities had already surged to $105.84 billion by the end of March 2019.

The government is paying huge price of foreign loans in terms of interest payment. Pakistan had paid almost Rs2 trillion as interest payment in previous fiscal year. The amount of interest payment had gone to Rs2 trillion from estimated Rs1.6 trillion due to massive depreciation in currency and increase in interest rate. Meanwhile, the country would have to pay Rs2.89 trillion as interest payment during current financial year.

Pakistan’s public debt and liabilities are rapidly increasing

The volume of foreign debt would further increase in the years to come. The incumbent government had already approached International Monetary Fund (IMF) for $6 billion loan package, which would be signed by the executive board of the Fund. The IMF programme would also pave way for receiving additional loans worth of $2-$3 billion from World Bank and Asian Development Bank. Meanwhile, the oil facility provided by Saudi Arabia worth $3.2 billion per year for three years became operational on July 1.

According to the latest data of Economic Affairs Division (EAD), the country had received over $9.76 billion of foreign assistance in July-May period of the year 2018-19. The country had received $9.5 billion in loans and $263 million grants during ten months of the ongoing fiscal year. The PML-N government had budgeted foreign assistance of $9.69 billion for 2018-19 including $394.34 million grant and $9.297 billion loans, as shown in the EAD data. The amount of borrowing has exceeded the budgeted level in eleven months.

According to the EAD data, the Asian Development Bank (ADB) disbursed $453.23 million in first eleven months of the ongoing fiscal year against the budgeted estimates of $1.38 billion. Pakistan received $2.13 billion from China in the current fiscal year against the budgeted estimate of $840.99 million. USA disbursed $70.51 million, International Development Association (IDA) $288 million, UK $80.4 million, France $66.57 million, and Germany $34.14 million in the current fiscal year so far. Saudi Arabia had provided $59.89 million and Japan $62.10 million during July to May period of the year 2018-19.

The commercial financing was recorded at $3.7 billion during eleven months of the ongoing fiscal year. Foreign commercial loans exceeded the annual estimate of $2 billion. In commercial loans, the government has borrowed $271.5 million from Ajman Bank PJSC.

A consortium of Credit Suisse AG, UBL and ABL gave an additional $200 million last month, taking its total loans in the past 11 months to $495 million. Noor Bank released $222.5 million, taking its total disbursements to $242.5 million in 11 months.

The Islamic Development Bank (IDB) had given loan of (S-Term) $648.07 million during 11 months of the year 2018-19. The IDB had activated its three-year $4.5-billion oil financing facility for Pakistan in July last year. The International Islamic Trade Finance Corporation (ITFC), a member of the IDB Group would roll over a loan of $4.5 billion to Pakistan in next three year, $1.5 billion in each fiscal year.