Pakistan is experiencing a substantial decline in its ability to secure dollar external loans, with foreign borrowing dropping by 50%, a situation occurring as Islamabad seeks increased inflows.

As per data released by the Economic Affairs Division (EAD) on Monday, reliable government sources affirmed that foreign remittances received in November 2023 amounted to only $415.99 million, in contrast to the $846.76 million recorded in the same month of the previous fiscal year, reflecting a nearly 50% reduction in loans obtained.

Ironically, despite plans to generate four and a half billion dollars in foreign trade loans during the current financial year, Islamabad has not garnered any proceeds, despite favorable interest rates in international markets. Despite aiming for a 1.5 billion dollar international bond, the government has not initiated one.

Comparing the first five months (July-November) of 2023-24, Pakistan received a total of $4.285 billion in foreign loans, a decrease from the $5.11 billion received during the same period in the previous financial year. Notably, the Economic Affairs Division did not factor in the $1.2 billion received from the International Monetary Fund, approved under the $3 billion Standby Arrangement Program.

With the inclusion of the IMF tranche, total dollar inflows for the first five months of the current fiscal year are expected to reach $5.5 billion.

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