Pakistan struggles to meet foreign loan targets

Pakistan has faced challenges in meeting its foreign loan and grant targets for the current fiscal year, receiving only $9.8 billion in the first nine months compared to the annual goal of $17.4 billion. The low inflows have been attributed to a challenging global environment and Pakistan's poor credit rating, limiting its access to international financial support.

The Ministry of Economic Affairs reported that the country could secure about $6.899 billion in foreign economic assistance during this period, representing 39% of the annual target. Despite receiving support from the IMF and the UAE, total foreign inflows amounted to $9.799 billion, falling short of the full-year target.

To address the shortfall, authorities have revised the foreign assistance target to around $11 billion and reduced the current account deficit estimate to $2 billion. The government had planned to launch a $1.5 billion Eurobond but postponed it due to high interest rates and the country's credit rating.

Inflows from multilateral and bilateral lenders, as well as overseas Pakistanis through Naya Pakistan Certificates, have contributed to the total foreign assistance. However, the country still faces challenges in attracting private commercial banks, with zero inflows recorded in the first eight months of the fiscal year.

In conclusion, Pakistan's efforts to meet its foreign loan and grant targets have been hampered by global economic conditions and its credit rating. The government's revised assistance target and focus on managing debt and trade may help address the funding gap and stabilize the current account deficit.