Pakistan Fails to Attract More Loans in 4 Months Due to IMF Delay

Foreign assistance inflows into Pakistan sharply declined by over 55 percent to $2.7 billion during July-October FY25 compared to $6.05 billion in the same period last year. Lending partners refused to release financing due to delays in disbursements under the International Monetary Fund (IMF) program. The Economic Affairs Division (EAD) in its latest Foreign Assistance Report said total inflows for the period stood at $1.72 billion, excluding $1 billion received from the IMF in late September. This puts total inflows at $2.72 billion, far below the annual target of $19.4 billion. Last year, inflows during the same period reached $3.85 billion against an annual target of $17.6 billion. Budgetary support loans accounted for $897 million of the total inflows, while $826 million was allocated to project financing. Comparatively, the previous year’s project aid stood at $992 million, with $2.53 billion secured as program loans. Multilateral inflows increased slightly to $721 million from $597 million last year, with the World Bank leading at $364 million, followed by the Asian Development Bank and the Islamic Development Bank. Bilateral disbursements dropped to $260 million from $436 million last year. China, France, and the United States contributed $97 million, $90 million, and $38 million, respectively. Commercial loans saw a modest recovery of $200 million, a slight improvement over last year when lenders largely avoided financing Pakistan. However, this figure remains far from the government’s $3.8 billion target for the year. $5 billion in time deposits from Saudi Arabia and $4 billion in China’s SAFE deposits have yet to materialize. These funds are crucial to bridging the external financing gap under the IMF program. Pakistan also received $542 million through Naya Pakistan Certificates.