ISLAMABAD    -    Pakistan would make foreign borrowing of Rs3.166 trillion in next fiscal year to maintain foreign exchange reserves that are projected to decline mainly due to repayment of previous loans and financing of current account deficit.

The government has projected foreign assistance of Rs 3.166 trillion for 2022-23 as against revised Rs3.144 trillion budgeted for the current fiscal year. The government has estimated Rs722.341 billion under the head of programme loans and Rs2.133 trillion under the head of other loans.

Finance Minister Miftah Ismail had already said Pakistan would need external financing of $41 billion in next fiscal year. Sharing details, he explained that the government would repay previous loan of $21 billion and current account deficit has projected at $12 billion in the upcoming financial year. He was optimistic that government would arrange the financing.

The programme loans estimated in the budget for 2022-23 are classified as Rs 140.884 billion from Asian Development Bank (ADB), Rs 159.608 billion from International Development Association (IDA), Rs 115.878 billion from International Bank for Reconstruction and Development (IBRD) and Rs 303.180 billion from Pakistan certificates. There would be no budget support from the International Monetary Fund (IMF) in next fiscal year.

According to the budget documents, there is no amount budgeted from China safe deposits (bilateral) for next fiscal year. The government has budgeted Rs148.8 billion from Saudi Arabia (oil facility) for the next fiscal year against zero for the current fiscal year which has been revised to Rs70 billion.

Meanwhile, the government has budgeted Rs1.389 trillion loans from the foreign commercial banks during the year 2022-23 as against Rs 779.2 billion for 2021-22 which was later revised upward to Rs 821.923 billion.  The government has budgeted Rs 372 billion from Euro bond/ international Sukuk for 2022-23 against Rs 560 billion budgeted for the current fiscal year which is revised to Rs342.544 billion.  The government has budgeted Rs 223.2 billion from Islamic Development Bank for the next fiscal year against Rs 160 billion for the current fiscal year which is revised to Rs 232.225 billion.  The government has budgeted, no money for budgetary support from friendly countries for the next fiscal year. No amount was budgeted under this head for the current fiscal year.

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.