Foreign Assistance to Pakistan Declines by 60.5%

KARACHI: In a concerning turn of events, Pakistan's ambitious loan program with the International Monetary Fund (IMF) has hit a major setback, resulting in a substantial decline of 60.5% in foreign assistance received by the country during the first ten months of the current fiscal year 2022-23 (July to April).

According to the latest details unveiled by the Economic Affairs Division, Pakistan has managed to secure only $812 million in foreign assistance during the aforementioned period.

This figure is alarmingly lower compared to the $1.3 billion received in the same timeframe of the previous fiscal year.

The monthly report on foreign assistance, released by the Economic Affairs Division until April 2023, reveals that an estimated $2.265 billion of foreign assistance had been projected in the budget for the current fiscal year.

However, the actual figures have fallen far below these expectations, raising concerns about the country's financial stability.

Digging deeper into the report, it becomes evident that the Asian Development Bank has extended a loan of $197 million during the first ten months of the fiscal year.

Additionally, the World Bank has granted a loan of $117 million, while the IMF has provided a loan of $116 million. 

These loans have played a crucial role in bolstering Pakistan's economy in the past, but the current decline in foreign assistance poses significant challenges.

Saudi Arabia, a long-standing ally of Pakistan, has extended aid of $98 million through the oil facility during the current fiscal year from July to April.

However, even with this assistance, the overall foreign funding remains insufficient to meet the country's growing financial needs.

To address the funding gap, Pakistan resorted to borrowing from commercial banks, amounting to $90 million during the ten-month period.

Furthermore, an additional $67.72 million was obtained through the issuance of New Pakistan Certificates, highlighting the government's efforts to explore alternative funding sources.

The decline in foreign assistance comes as a wake-up call for Pakistan's financial authorities. It emphasizes the urgent need to reassess the loan program with the IMF and explore strategies to attract more foreign investment.

The economic stability and future development of the country hang in the balance, making it imperative for policymakers to take decisive actions.

As Pakistan enters the final months of the current fiscal year, it faces an uphill battle in securing adequate foreign assistance to sustain its economy.

The challenge ahead is not only to recover from the setback but also to create an environment that encourages burstiness in economic growth, enabling Pakistan to write a new chapter of prosperity and stability.