The Economic Affairs Division (EAD) reports that the government of Pakistan signed new agreements worth $642 million as commitments in the first quarter of the current fiscal year (July-September) 2023-24.
Official data revealed that the World Bank committed $542 million (84 percent of total commitments), and the Islamic Development Bank (IsDB) committed $100 million (16 percent) during the period under review.
The Division stated that a prudent external debt management strategy coupled with strong institutional arrangements is necessary for managing external debt and improving the country’s repayment capacity. Debt can be productive if it is used to create assets that generate positive returns and externalities.
Borrowing can be productive for developing countries’ economic growth as long as the financial returns are higher than the cost of borrowed funds. While external debt is helpful for the development of the economy, dependence on external debt must be closely monitored and managed, the EAD added.
The data further shows that disbursements of $3.536 million during 1st quarter of 2023-24 were mainly under the projects and programs loans/grants from multilateral, bilateral development partners and financial institutions.