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Pakistan adds another $115m loan to its growing debt

Expensive unconventional borrowing continues unabated, as Pakistan obtained another short-term foreign loan of $115 million from Dubai-based Noor Bank, taking the federal government’s total external borrowings to $5.3 billion in the last nine months alone.

 The fresh loan amount may not appear large, but indicates towards serious problems in attracting non-debt creating inflows and arranging funds from traditional and relatively cheap source of foreign financing. The $115 million lending was 60% of the total new loans that the government obtained in March.

Expensive unconventional borrowing continues unabated, as Pakistan obtained another short-term foreign loan of $115 million from Dubai-based Noor Bank, taking the federal government’s total external borrowings to $5.3 billion in the last nine months alone.

The fresh loan amount may not appear large, but indicates towards serious problems in attracting non-debt creating inflows and arranging funds from traditional and relatively cheap source of foreign financing. The $115 million lending was 60% of the total new loans that the government obtained in March.

Pakistan also borrowed $851.5 million from Asian Development Bank (ADB), which was 81% of the annual budget estimates. The government is also trying to get another $600 million from the ADB before end of this fiscal year.

 The loans from the World Bank stood at only $333 million or 22% of the annual estimates of $1.5 billion. The Islamic Development Bank gave $390 million, largely commercial borrowing for crude oil payments.

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