Pakistan obtained $1.81 billion in foreign loans during the first quarter (July–September) of the current fiscal year (FY2025–26), official data from the Economic Affairs Division (EAD) shows.
Notably, the government did not raise any commercial foreign loans during this period — a shift that reflects cautious borrowing and reliance on multilateral and bilateral development partners.
Gradual Uptick in Inflows
Compared to $1.3 billion secured in the same quarter last year, this year’s inflows represent a moderate improvement in Pakistan’s external financing position. The government has set an ambitious target of $19.92 billion in total foreign loans and grants for FY26.
Out of this, around $9 billion is expected to come in the form of deposits from Saudi Arabia and China’s SAFE deposits, both of which are anticipated to be rolled over during the year. That leaves roughly $10.9 billion to be mobilized through other loan disbursements and project financing.
Bilateral Partners Step In
Pakistan received $334.8 million in foreign loans from its bilateral partners during the first quarter. The Kingdom of Saudi Arabia emerged as the largest contributor, disbursing $300 million through the Saudi Oil Facility. Other partners included China ($9.75 million), France ($8.5 million), Germany ($3.03 million), Japan ($6.16 million), Korea ($4.21 million), Kuwait ($0.3 million), and the United States ($0.25 million).
Strong Support from Multilateral Lenders
Multilateral institutions contributed the lion’s share — $939.28 million — in the same period. The World Bank remained Pakistan’s largest multilateral creditor, providing $287.32 million in IDA loans and $144.94 million under IBRD lending.
The Islamic Development Bank (IsDB) also extended significant support, disbursing $311.43 million for short-term financing and an additional $50 million for project funding.
The Asian Development Bank (ADB) provided $116.96 million, while the Asian Infrastructure Investment Bank (AIIB) added $20.7 million, and IFAD contributed $7.45 million in project-based financing.
Reliance on Non-Debt Instruments
Meanwhile, Pakistan also raised $541.57 million through Naya Pakistan Certificates, reflecting continued trust from overseas Pakistanis.
However, the government has yet to launch any international bonds or commercial borrowings this fiscal year which is the clear manifestation of a strategic effort to manage external debt more prudently while waiting for improved market conditions.