Pakistan raises $4.5bn in foreign loans in first half of FY26

• $209.5m received under RSF as first IMF installment.
• Govt fails to launch any int'l bond during first half of FY 2025-26.
• Largest portion, $600m received from Saudi Arabia in as oil facility.
  

ISLAMABAD: Pakistan obtained $4.5 billion in foreign loans from multilateral and bilateral creditors in the first half (July-December) of the current fiscal year 2025-26, up from $3.6 billion in the same period last year, The News reported on Thursday.

The foreign loans of $4.5 billion do not include the International Monetary Fund’s (IMF) $1 billion loan under the Extended Fund Facility (EFF), which Pakistan received following completion of the second review and release of the third tranche. 

However, the disbursement of $209.5 million under the Resilience and Sustainability Facility (RSF), received as the first installment from the IMF, forms part of the releases recorded by the Economic Affairs Division (EAD).

Ironically, Pakistan failed to launch any international bond during the first half of the current fiscal year. Earlier, the Minister for Finance had announced plans to return to the international bond market within weeks and later consider issuing a dollar-denominated Eurobond or Sukuk in 2026. 

A significant jump was recorded in inflows from bilateral creditors, with Pakistan receiving $1.07 billion during the July-December period of FY26, compared to $311.7 million in the same period of the previous fiscal year. Under a Chinese-guaranteed loan, Pakistan received $255.6 million.

Among bilateral lenders, the largest portion — $600 million — was received from Saudi Arabia in the form of an oil facility, which substantially contributed to the increase in bilateral inflows.

China disbursed $72 million, Denmark $71.15 million, France $15.6 million, Germany $5.15 million, Japan $11.86 million, South Korea $9.49 million, Kuwait $22.06 million, and Saudi Arabia $8.7 million in project financing during the first six months of CFY 2026.

From multilateral creditors, Pakistan received $1.967 billion in the first half of the current fiscal year, compared to $1.8 billion in the same period of the previous year.

The Asian Development Bank (ADB) disbursed $549 million, the Asian Infrastructure Investment Bank $57.19 million, World Bank’s IBRD $221.73 million, World Bank’s IDA $580.77 million, Islamic Development Bank (short-term) $483.78 million, IsDB $52.49 million, IFAD $21 million, and the OPEC Fund $0.7 million.

Pakistan was able to raise only $56.3 million through foreign commercial loans during the first six months of the current fiscal year, a sharp decline from $500 million raised in the same period last year. 

Pakistan is targeting $3.1 billion in commercial financing during the ongoing fiscal year. From the IMF under the RSF, Islamabad received $209.5 million as the first instalment out of the total approved funding of $1.4 billion.

Meanwhile, inflows through Naya Pakistan Certificates amounted to $1.2 billion in the first half of the current fiscal year, compared to $927.6 million during the corresponding period of the previous fiscal year.