Pakistan Received $1.82 Billion in Foreign Loans During 1QFY26

Pakistan secured a total of $1.82 billion in foreign assistance during the first quarter of fiscal year 2025-26 (FY26), according to data released by the Economic Affairs Division (EAD). The inflows include bilateral and multilateral loans and grants, as well as investments in Naya Pakistan Certificates. Between July and September, Pakistan received $19.37 million in bilateral grants, with $2.42 million arriving in September alone. The largest bilateral grant contributors were China ($9.75 million), Japan ($6.16 million), and Germany ($3 million). Bilateral loans for the quarter totaled $334.8 million, with the Saudi Oil Facility accounting for a significant $300 million. Other notable bilateral lenders included China ($9.75 million), France ($8.5 million), Japan ($6.16 million), South Korea ($4.21 million), and Germany ($3.03 million). In September, bilateral loans reached $102 million, with $100 million coming from the Saudi Oil Facility and $2 million from China. On the multilateral side, grants amounted to $21.53 million during the quarter, with $12.95 million from the International Bank for Reconstruction and Development (IBRD) and $8.18 million from the International Development Association (IDA). Multilateral loans reached $939.28 million, with the Islamic Development Bank ($311.43 million), IDA ($287 million), IBRD ($144.94 million), and the Asian Development Bank ($116.94 million) as key contributors. Combined, multilateral and bilateral grants stood at $40.90 million, while total loan disbursements reached $1.27 billion for the quarter. Investments in Naya Pakistan Certificates during July-September amounted to $541.57 million, against a full-year budget estimate of $609 million. To maintain healthy foreign exchange reserves, Pakistan held $9 billion as term deposits, including $5 billion from Saudi Arabia and a $4 billion safe deposit from China. It’s worth noting that IMF disbursements under the Extended Fund Facility (EFF) are not reflected in EAD or Ministry of Finance accounts, as these are recorded as balance of payments support on the State Bank of Pakistan’s balance sheet. For FY26, the government has budgeted $63.72 million in multilateral grants and $4.98 billion in loans, indicating a continued reliance on external financing to support the country’s economic stability.