During the previous financial year FY2017-18 which ended in June this year, Pakistan has taken record loans of $11.4 billion, the borrowing would increase further due to depleting foreign reserves, increasing debt and dependence on external creditors.
According to the officials in Ministry of Finance and Economic Affairs, Pakistan took $11.4 billion in loans during the previous financial year FY18, an additional loan of $500 million from China State Administration of Foreign Exchange (SAFE) was also included in the loans—Express Tribune reported.
China provided cash to help to stabilize Pakistan’s declining foreign exchange reserves in June. During the financial year, FY2016-17 Pakistan took $10.1 billion in loans which were less than the FY18, $11.4 billion was taken during this time highest of all times.
39.4 percent of total external borrowing was taken from China, China gave $4.5 billion including $2.2 billion in commercial loans, $1.8 billion for CPEC and $500 million SAFE deposit.
During FY2016-17 China funded Pakistan with $3.9 billion, loans secured during FY18 were 48 percent higher than the government’s own projection before the parliament in June last year.
Pakistan witnessed too much dependence on unconventional borrowing during the previous government, total unconventional borrowing during FY18 was recorded at $6.7 billion including $2.5 billion raised using a sovereign bond, making a total of 58.8 percent external loans.
The banks including Islamic Development Bank (IDB), Asian Development Bank (ADB), Standard Chartered Bank London, Dubai Bank, Industrial and Commercial Bank of China, China Development Bank, Japanese bank and some others provided loans to Pakistan.