ISLAMABAD (our reporter):- The Government has paid $1.35 billion on account of debt servicing of external public loans during the first quarter of current fiscal year.
According to a reported issued by the Economic Affairs Division on Thursday, Pakistan made payments including principal repayment of $1.036 billion and interest payments of $317 million during July-Sept 2021.
During the period under review, the bulk of repayments were made to foreign commercial banks, having 32% share in the total repayments, followed by World Bank (22% share), ADB (20% share), and China (14% share in the total).
The report shows that Pakistan paid $427 million to Foreign Commercial Banks including principle amount of $315 million and interest amount of $112 million during the first quarter of the current fiscal year.
Pakistan also made payments to World Bank amount of $292 million including $221 million principal amount and $70 million for interest payments.
The Government also paid to the Asian Development Bank (ADB) amount of $273 million including $245 for principal amount and $27 million for Interest payment. It also paid $259 million to the International Monetary Fund (IMF) including $223 million of principal amount and 36 million for interest.
The Country also paid $32 million interest for Bonds and $14 million to China including $7 million for principal amount and $7 interest payment and $3 million principal amount to Kuwait.
For the period under review, net transfers to the Government’s external public debt were $2.065 billion whereas it was $1.408 billion during the corresponding period last year. The share of concessional external loans with longer maturity increased by $1.145 billion (multilateral and bilateral loans) and the share of commercial borrowing was increased by $1.143 billion, this includes net borrowing of $143 million from commercial banks and USD 1,000 million from Eurobonds.
Net transfer is also a critical variable to analyze the overall external public debt stock. It indicates any increase or decrease in the external public debt stock and is calculated as the difference between the external public loans received and their repayments made to the foreign creditors during a specific period.
A positive balance reflects an increase in external debt stock while negative balance depicts a decrease in external debt stock.
The Government signed new agreements worth $2.355 billion during the first quarter of the current fiscal year. Out of which an amount of $1.727 billion (or 73% of the total commitments) was earmarked as program financing through foreign commercial banks and Eurobonds to broaden and deepen the financial system, improve fiscal management and regulatory framework to foster growth and competitiveness in Pakistan. An amount of $628 million (or 27% of the total) was allocated for project financing. No funds have been committed for commodity financing in the 1st quarter.