Foreign Economic Assistance Inflows Rise Nearly 20pc to Pakistan

Pakistan's economy has seen a notable uptick in foreign economic assistance, with inflows surging by almost 20 percent to $6.594 billion during the first three quarters of the current fiscal year (July-March).

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Foreign economic assistance (FEA) inflows to Pakistan surged by almost 20 per cent to $6.594bn in the first three quarters (July-March) of the current fiscal year, mainly on the back of programme support from the International Monetary Fund (IMF).

This significant increase is largely attributed to program support from the International Monetary Fund (IMF), which has provided crucial financial backing. Total inflows, excluding IMF disbursements, reached $6.594 billion, a substantial rise from $5.507 billion in the same period last year. The inflows in March alone were particularly strong, marking a 32 percent increase compared to the previous year.

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Total inflows (excluding IMF disbursements), comprising both loans and grants, amounted to $6.594bn during the first nine months of the current fiscal year, up from $5.507bn in the same period last year, reflecting an increase of 19.7pc.

Breaking down the figures, foreign loan inflows saw a considerable jump of almost 29 percent, indicating a reliance on borrowing to manage financial obligations. Conversely, grant inflows experienced a decline of 27 percent, suggesting a shift in the nature of external support. The government had set a target of $19.9 billion for total foreign inflows for FY26, and these figures show progress towards that goal, though challenges remain.

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Inflows in March alone stood at $731.3m, compared to $692m in February and $555m in the corresponding month last year, marking a 32pc increase.

The Ministry of Economic Affairs confirmed these inflows, highlighting that a significant portion was for project financing, while non-project inflows, including budgetary support, also contributed. Despite the overall increase, Pakistan received less from multilateral lenders than anticipated, although inflows from bilateral lenders saw a dramatic increase compared to the previous year. This mixed picture reflects the complex and evolving landscape of Pakistan's external financing.

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Of the total inflows, foreign loan inflows in 9MFY26 amounted to $6.494bn, compared to $5.37bn in the corresponding period last year, showing an increase of almost 29pc.