ISLAMABAD: Pakistan’s foreign loan inflows rose sharply by more than 33% to $2.29 billion during the first four months (July–October) of fiscal year 2025-26, largely driven by renewed support from the International Monetary Fund (IMF).
The uptick marks a notably stronger start to the fiscal year compared to last year, when the country grappled with funding shortages due to the absence of an IMF programme.
Total external inflows — including loans and grants — reached $2.293 billion, up from $1.723 billion in the same period last year. In October alone, inflows edged up to $471 million, slightly above the $414 million recorded in October 2024.
Loan disbursements formed the bulk of the inflows, climbing over 39% to $1.82 billion, compared with $1.31 billion a year earlier. Grant inflows, however, fell sharply to $50.6 million, down from $87.7 million, a year-on-year decline of 73%.
For FY2025-26, Pakistan has set a $19.9 billion target for total foreign inflows, slightly higher than last year’s $19.4 billion goal.
Comparison with Recent Years
The current pace of inflows remains below the extraordinary surge of July–October 2023, when Pakistan received over $3.85 billion following its nine-month Stand-By Arrangement (SBA) with the IMF.
That period saw a massive $2 billion time deposit from Saudi Arabia, as well as a $1.2 billion IMF tranche and $1 billion from the UAE, pushing total July 2023 inflows to $5.1 billion.
Breakdown of FY2025-26 Inflows
According to the Ministry of Economic Affairs, of the $2.293 billion received during the first four months of the current fiscal year- $773 million came through project financing, $1.52 billion came via non-project financing and about $735 million was secured for budget support – modest progress given the annual budget-support target of $13.5 billion, compared with last year’s $15 billion.
Pakistan also received $400 million under the Saudi oil facility — $100 million per month, against a full-year target of $1 billion.
From multilateral institutions (excluding the IMF), the country obtained $1.2 billion in the first four months, up from $720 million in the same period last year, toward a full-year target of $5 billion.
Bilateral lenders (excluding the three “strategic partners”) also increased their support, extending $449 million, 73% higher than last year’s $260 million, though still far from the $1.36 billion annual target.
Combined inflows from bilateral and multilateral partners reached $1.56 billion, against a full-year target of $6.4 billion. Last year, these inflows amounted to $981 million in the same period.
Naya Pakistan Certificates and Other Sources
Overseas Pakistanis contributed $735 million through Naya Pakistan Certificates, up from $542 million last year — already surpassing the government’s full-year estimate of $609 million.
The overall $19.9 billion external financing plan for FY2025-26 includes: $6.4 billion from multilateral and bilateral lenders, $400 million from international bonds, $3.1 billion in foreign commercial borrowing, $5 billion in time deposits from Saudi Arabia and $4 billion in SAFE deposits from China.
According to a Dawn’s report, the stronger early-year inflows may ease pressure on Pakistan’s external accounts, though meeting the full-year targets will depend heavily on sustained multilateral engagement, bilateral commitments, and global financial conditions.
