Islamabad: The economic situation of Pakistan, which has become synonym of terrorism, has deteriorated significantly. The country’s economy is running with the help of loans from foreign sources. Cash-strapped Pakistan contracted $ 10.447 billion worth of new foreign loans during the fiscal year 2019-20, almost one-fourth higher than previous year’s USD 8.4 billion. Pakistan has resorted to multilateral financial organizations and commercial banks for these loans.
According to the Annual Report on Foreign Economic Assistance 2019-20 released by the Ministry of Economic Affairs, 99 per cent of the new commitments were for loans and the remaining 1 per cent in grant commitments. Out of the total new agreements of USD 10.447 billion, more than USD 6.79 billion financing agreements were signed with multilateral agencies such as the Asian Development Bank, World Bank and Islamic Development Bank, USD 3.463 billion with foreign commercial banks and USD 193 million with governments of other countries.
The report said that despite the high level of loan installments, Pakistan was able to meet its liabilities by mobilizing foreign aid during FY 2019-20. It has also been said in the report that the government of Pakistan is focusing on getting long term loans with liberal terms instead of short term cash loan assistance at a higher cost from abroad.
