ISLAMABAD - Pakistan would borrow whopping Rs5.5 trillion from international lenders in the current fiscal year to maintain its foreign exchange reserves, repay previous loans and financing of current account deficit.

Earlier, in annual budget 2022-23, the government had projected to borrow only Rs3.17 trillion from international sources in the ongoing financial year. However, the budget documents lacked financing from International Monetary Fund (IMF), Saudi Arabia and of SAFE China deposit. The volume of the projected international borrowing has now increased to Rs5.5 trillion after incorporating funding from aforesaid sources.

The borrowing would be 74 percent higher than the previous estimates of the government. After the revision, the external resources of Rs5.503 trillion projected for 2022-23 are greater by more than 200 per cent from the initial Rs2.7 trillion budgeted for 2021-22.

The incumbent government, which is struggling to arrange dollars, would need external financing of $41 billion in the next fiscal year. The government would have to repay previous loan of $21 billion and current account deficit has projected at $12 billion and $8 billion more for increasing foreign exchange reserves to $18 billion in the upcoming financial year. Therefore, the government has planned to borrow massively in the current fiscal year. However, major financing would require revival of IMF programme, which would not only release around two billion dollars for Pakistan but it would also pave the way for getting loans from other multilateral and bilateral sources. According to the revised estimates, the government would borrow Rs588 billion from the IMF for budgetary support in current financial year. Meanwhile, it would receive Rs744 billion has been estimated under China SAFE deposits for the fiscal year 2022-23. Similarly, the country has projected to receive Rs558 billion from Saudi Arabia (time deposit).

In the initial budget presented on June 10, the government had budgeted estimates of Rs722.341 billion under the head of programme loans and Rs2.133 trillion under the head of other loans. However, in the updated budget documents, the government has budgeted Rs1.243 trillion under the head of programme loans and Rs3.993 trillion under the head of other loans.

The programme loans estimated in the budget for 2022-23 are classified as Rs140.884 billion from Asian Development Bank (ADB), Rs159.608 billion from International Development Association (IDA), Rs115.878 billion from International Bank for Reconstruction and Development (IBRD), and Rs303.180 billion from Pakistan certificates. The government has budgeted Rs1.389 trillion from foreign commercial banks for 2022-23 against Rs779.2 billion for 2021-22 which was later revised upward to Rs821.923 billion.

The government has budgeted Rs372 billion from Euro bond/international Sukuk for 2022-23 against Rs560 billion budgeted for the current fiscal year which is revised to Rs342.544 billion. The government has budgeted Rs223.2 billion from Islamic Development Bank for the fiscal year 2022-23 against Rs160 billion for the fiscal year 2021-22 which was later revised to Rs232.225 billion.

The successive governments are borrowing from external as well internal sources, which have increased the country’s overall debt. Pakistan’s public debt has recorded at Rs44.366 trillion at the end-March 2022. The breakup of Rs44.366 trillion showed that the domestic debt stood at Rs28.076 trillion and external debt at Rs16.29 trillion. Domestic debt was recorded at Rs 28,076 billion at end-March 2022, registering an increase of Rs 1,811 billion during the first nine months of the current fiscal year.