By Farooq Awan

Pakistan received $5.17 billion in foreign economic assistance during the first seven months of the current fiscal year, from July 2025 to January 2026, reflecting continued inflows from bilateral and multilateral development partners as well as international financial institutions to support the country’s development and fiscal needs.

According to the Ministry of Economic Affairs’ monthly report on foreign economic assistance, provisional disbursements totaled $5,170.34 million during July–January FY2025-26. The report also indicates that Pakistan received $625.70 million during January 2026 alone from various external partners.

The assistance includes funds disbursed in cash, kind, third-party payments, and capitalization during the reporting period. These inflows were provided through a combination of bilateral and multilateral partners, commercial banks, the International Monetary Fund (IMF), and non-project financing arrangements.

Multilateral institutions accounted for a major portion of the assistance. Disbursements from multilateral lenders reached $2,126.69 million during the July–January period, including $133.33 million received in January. Key multilateral partners include the Asian Development Bank (ADB), the International Bank for Reconstruction and Development (IBRD), the International Development Association (IDA), the Asian Infrastructure Investment Bank (AIIB), the Islamic Development Bank (IsDB), and the International Fund for Agricultural Development (IFAD).

Bilateral partners also contributed significantly to the inflows. Disbursements from bilateral donors totalled $931.88 million over the seven-month period, with $104.11 million received in January. Major bilateral contributors included China, Saudi Arabia, Germany, Japan, France, Denmark, Korea, Kuwait, and the United States.

The report further indicates that financing from commercial banks contributed $144.42 million during July–January FY2025-26, including $88.12 million disbursed in January. These inflows were mainly associated with budgetary support facilities arranged through international banking institutions.

Pakistan also received $209.51 million from the International Monetary Fund during the reporting period as part of external financial support.

Non-project financing constituted a substantial component of the external inflows. The report shows that non-project assistance reached $3,268.86 million during the seven-month period, including budgetary support and other financial facilities. Within this category, the Saudi Fund for Development’s oil facility accounted for $700 million during the fiscal period, including $100 million disbursed in January.

Another important component of non-project assistance was financing under the National Power Construction (NPC) arrangements. Disbursements under conventional NPC financing amounted to $405.64 million during July–January, while Islamic NPC financing reached $1,082.77 million during the same period.

Project financing also represented a significant portion of external development assistance. According to the report, project-related disbursements totaled $1,901.48 million during the July–January period. These funds were allocated to a range of development projects across sectors, including energy, infrastructure, water management, urban development, and social services.

The report notes that the overall inflows represent provisional disbursements recorded by the Debt Recording and Reporting Center of the Ministry of Economic Affairs. These figures include external assistance received for federally executed as well as provincially implemented development projects.

Foreign economic assistance remains an important source of financing for Pakistan’s development programs, particularly in sectors such as infrastructure, energy, water resources, and social development. The continued inflows during the current fiscal year reflect ongoing cooperation between Pakistan and its international development partners.

Credit: INP-WealthPk