ISLAMABAD: Pakistan obtained $1.81 billion in foreign loans during the first quarter (July–September) of the current fiscal year 2025–26, without raising any commercial financing, according to official data released by the Economic Affairs Division (EAD).
The disbursement marks a notable increase compared to the $1.3 billion received during the same period of the previous fiscal year. The government has set an ambitious foreign financing target of $19.92 billion for the entire fiscal year, including planned rollovers of $9 billion in deposits from Saudi Fund for Development (SFD) and SAFE deposits from People’s Republic of China.
This leaves $10.9 billion in expected fresh foreign loan disbursements for the remainder of the fiscal year.
Bilateral Partners Disburse $334.8 Million
During the first quarter, Pakistan received $334.8 million in foreign loans from bilateral partners. The largest contribution came from Saudi Arabia, which disbursed $300 million under the Saudi Oil Facility.
Other bilateral inflows included:
China: $9.75 million
France: $8.5 million
Germany: $3.03 million
Japan: $6.16 million
Korea: $4.21 million
Kuwait: $0.3 million
Saudi Arabia (other accounts): $2.59 million
United States: $0.25 million
Multilateral Institutions Provide $939.28 Million
Multilateral lenders contributed the largest share of external inflows in Q1, with total disbursements of $939.28 million.
World Bank (IDA & IBRD): $432.26 million
IDA: $287.32 million
IBRD: $144.94 million
Islamic Development Bank (IsDB): $361.43 million
$311.43 million in short-term borrowing
$50 million in project financing
Asian Development Bank (ADB): $116.96 million
Asian Infrastructure Investment Bank (AIIB): $20.7 million
International Fund for Agricultural Development (IFAD): $7.45 million
Naya Pakistan Certificates Attract $541.57 Million
In addition to loans from bilateral and multilateral partners, the government raised $541.57 million through Naya Pakistan Certificates during the first quarter.
No commercial financing or international bond issuance took place during this period. Similarly, no external loans were raised for direct budgetary support.
Financing Outlook for FY26
Pakistan’s foreign financing plan for FY26 heavily relies on bilateral rollovers and multilateral disbursements, with commercial borrowing playing no role so far. The reliance on concessional and program loans aligns with the government’s efforts to reduce costly commercial debt amid tight global credit conditions.
Economic analysts believe that while inflows from multilateral and bilateral sources offer some breathing space, the absence of commercial financing also reflects cautious lending sentiment from international markets. Ensuring timely inflows and meeting fiscal targets will be critical to maintaining external account stability in the coming months.
