The Asian Development Bank (ADB) will likely provide an additional $2.5bn loan in budgetary support to Pakistan in 2022-2023.
Yong Ye, country director of ADB, indicated the funding plan as he met Dr. Aisha Ghous Pasha, minister of state for Finance and Revenue, on Thursday.
According to a government statement, $1.5-2bn could be available before the end of the year, as reported by the Tribune.
Country Director Yong Ye and MoS Finance Dr. Aisha Ghous Pasha met today to discuss ADB pipeline assistance for the current year. They also discussed additional funding avenues for #Pakistan incl ADB's counter cyclical facility and program loans. #economy @FinMinistryPak @eadgop pic.twitter.com/oDHfKKhZSz
— ADBPakistan (@PakistanADB) May 12, 2022
Officials said the ADB had committed $10 billion in lending for Pakistan under the Country Partnership Strategy (CPS) for 2021 to 2025, envisaging $2.5bn annually.
Pakistan seeks funds to avert BOP difficulties
Pakistan urgently seeks more funding through programme loans to avert its balance of payment difficulties. It is encouraging to note that ADB wants to move ahead to extend its all-out support for Pakistan. The latest CPS will continue to be implemented till 2025.
Pakistan is classified as a group B developing member country with access to regular ordinary capital resources (OCR) lending and concessional OCR lending. The indicative resources available for commitment during the first three years of the CPS period (2021–2023) total $5.4 billion, comprising $3.6bn for regular OCR lending and $1.8bn for concessional OCR lending.
Read more: ADB to provide $100m to support farmers
According to the official statement, while welcoming the ADB team, minister Pasha acknowledged that ADB has always assisted in the pursuance of the reform and development plan in the country.
She recognised the all-weather and trusted partnership of ADB with Pakistan, especially in energy, education, and fiscal and debt management.
Further, she shared that currently, Pakistan is facing various fiscal and monetary challenges. Still, the present government is keenly working on various structural reform measures to bring back the economy on an inclusive and sustainable growth path.
The ADB country director briefed the Minister of State on the ADB’s portfolio and the country’s strategy. He said ADB was devoted to supporting the reform agenda of SOEs governance and regulations, women-inclusive finance sector development, and PPP frameworks.
The state finance minister thanked ADB’s Yong Ye and his team for their dedication and assured them of full support and speedy implementation of the ongoing programme.
External debt soars by almost $5bn
Meanwhile, the Ministry of Economic Affairs (MEA) said Pakistan’s external debt has increased by $4.77 billion in the first half of the current fiscal year to $90.6bn.
In its quarterly report on Foreign Economic Assistance (FEA) for July-December 2021, the MEA said the total external loan inflows amounted to $8.972bn against loan outflows of $4.2bn.
It said that during the first half of FY22, the government of Pakistan signed new loan agreements worth $8.481bn as commitments. These included $2.484bn worth of agreements with foreign commercial banks, $1.956bn with multilateral development partners, $3bn as safe deposits, $1bn committed as Eurobonds, and another $1bn from the international capital markets through tap-issuance.