Foreign Loans Jump 24% to $1.7 Billion in Jul-Aug 2026

Foreign economic assistance inflows to Pakistan rose 24 percent to $1.7 billion during the first two months of fiscal year 2026 27 as the government resumed commercial borrowing.

Total inflows, including loans and grants but excluding the International Monetary Fund, reached $1.703 billion in July and August, compared with $1.377 billion during the same period last year.

Inflows in August alone rose 38 percent to $940 million from $680 million a year earlier, while July inflows increased to $764 million from $697 million, according to data reported by the Ministry of Economic Affairs.

The increase was mainly driven by a $300 million commercial loan from United Bank Dubai and an additional $265 million in investments in Naya Pakistan Certificates by overseas Pakistanis.

There were no commercial loan inflows during the first two months of FY2026, as commercial banks had stayed away from Pakistan for several years amid economic challenges and a weak credit rating.

Overseas Pakistanis’ investments in Naya Pakistan Certificates increased nearly 73 percent to $630 million during the first two months of FY2027 from $365 million a year earlier. This included $182 million through conventional certificates and $448 million through Islamic certificates.

In contrast, inflows from multilateral and bilateral lenders fell 43.24 percent to $626 million from $1.103 billion. Bilateral inflows dropped 85 percent to $35 million from $232 million, while multilateral inflows declined 24 percent to $591 million from $781 million.

The government has set a foreign economic assistance target of about $24 billion for FY2027, compared with $20 billion for FY2026. According to the Ministry of Economic Affairs, Pakistan received slightly more than $16 billion during FY2026.

Of the $1.7 billion received during July and August, $485 million was for project financing and $1.22 billion was classified as non project inflows. This included about $258 million in loans for budget support.

United Bank Dubai was the largest lender during the period with $300 million, followed by the World Bank with $286 million and the Islamic Development Bank with $191 million. China was the fourth largest lender overall and the largest bilateral lender with $146 million, followed by the Asian Development Bank with $97 million.