Pakistan’s foreign assistance dips by more than 55% in FY25.
Foreign aid to Pakistan had declined by over 55% during the first four months of the fiscal year 2025 to just $2.7 billion from $6.05 billion in the same period last year. Much of this sharp decline is attributed to delays in the release of funds under the IMF program. Lending partners have withheld financing, and the result has been the plunge.
According to the latest report of Pakistan’s Economic Affairs Division (EAD), foreign assistance from July to October in FY25 totals $1.72 billion, excluding $1 billion received from the IMF in late September. These totaled far below the annual target of $19.4 billion. In comparison, it is also lower than last year’s $3.85 billion for the same period which had a target of $17.6 billion.
The aid is disbursed at $897 million in budgetary support loans and $826 million for financing projects. Last year, project aid was $992 million and program loans were $2.53 billion for Pakistan.
Multilateral and Bilateral Assistance
Multilateral inflows showed a minor increase to $721 million against last year’s $597 million. Contributions from the World Bank accounted for $364 million, while the Asian Development Bank and Islamic Development Bank also played key roles. Bilateral disbursements declined to $260 million as against last year’s $436 million. Some of the major contributors were China ($97 million), France ($90 million), and the United States at $38 million.
Commercial Loans and Pending Deposits
Lending for commercials improved slightly to $200 million, which is better than last year when commercial lenders avoided financing Pakistan. It is still way short of the government’s aim to achieve $3.8 billion in commercial lending this year.
Crucially, much-needed inflows from Saudi Arabia ($5 billion in time deposits) and China ($4 billion in SAFE deposits) are not yet received, as are necessary to close Pakistan’s external financing gap under the IMF program.
Lastly, $542 million has been received in the form of Naya Pakistan Certificates.
