Pakistan received $5.445 billion in foreign economic assistance during the first quarter of fiscal year 2026-27, marking a nearly threefold increase compared with the $1.815 billion received during the corresponding period of the previous fiscal year. The inflows were recorded between July and September 2026, according to data released by the Economic Affairs Division (EAD). The increase highlights Pakistan’s continued reliance on external financing to support its budgetary requirements, development activities and other financial needs.
The latest figures show that foreign economic assistance increased by approximately $3.63 billion year-on-year during the quarter. The amount received in the first three months of FY2026-27 was substantially higher than the inflows recorded during July-September of FY2025-26. While external financing can help the government meet immediate funding requirements, the rising volume of assistance also underscores the importance of managing borrowing obligations and ensuring that borrowed funds support sustainable economic activity.
Monthly figures released by the EAD showed that Pakistan received $952.26 million through multilateral and bilateral loans and grants in September 2026, compared with $626.19 million in August. The increase in monthly inflows contributed to the overall assistance recorded during the quarter. China provided $0.03 million in September, while no grant from China was recorded in August. In July, however, Pakistan received a loan of $146.62 million from China, according to the published data.
The composition of the assistance indicates that a substantial portion was directed towards budgetary support and non-project financing. Of the total $5.445 billion received during July-September, approximately $4.2 billion was provided for budgetary support. Pakistan also received $111.63 million in programme loans and $238.44 million through short-term loans classified in the data as IsDB financing. The figures reflect the different purposes for which external assistance was obtained during the quarter, including support for government financing needs and specific development-related activities.
The EAD data further showed that non-project loans accounted for $4.541 billion of the total assistance, while project loans amounted to $907.71 million. Non-project financing generally supports broader financing requirements rather than being tied to an individual development project, whereas project loans are associated with specified initiatives. The difference between these categories indicates that most of the foreign assistance received during the quarter was recorded under non-project financing.
Bilateral loans and grants contributed $58.10 million to Pakistan’s total foreign economic assistance during the first quarter. Germany provided $14.69 million, followed by France with $20 million and Saudi Arabia with $12.87 million. Pakistan also received $5.02 million from Korea, $3.15 million from Denmark, $2.26 million from Japan and $0.08 million from the United States. These contributions represented the bilateral component of the assistance recorded for the July-September period.
Multilateral institutions accounted for the larger share of the reported financing. Pakistan received a combined $894.17 million in multilateral loans and grants during the quarter, according to the EAD figures. The Asian Development Bank provided $153.55 million, while the Asian Infrastructure Investment Bank contributed $26.05 million. Financing from the International Bank for Reconstruction and Development stood at $83.79 million, while the International Development Association provided $359.04 million.
Other multilateral inflows included $28.27 million from the Islamic Development Bank, in addition to the $238.44 million in short-term financing listed separately under the institution’s name. Pakistan also received $3.87 million from the International Fund for Agricultural Development and $1.15 million from the OPEC Fund. These inflows demonstrate the role of multilateral lenders in providing financing to Pakistan alongside bilateral partners.
The sharp year-on-year increase in foreign assistance provides the government with additional external resources, but the figures also underline the need to assess financing requirements alongside repayment commitments and economic performance. The distinction between budgetary support, programme financing and project-related loans is important when evaluating how external funds are being used and what benefits they may deliver.
The first-quarter data provides an early indication of Pakistan’s external financing pattern for FY2026-27. Future inflows will depend on financing arrangements, disbursement schedules and the availability of funds from bilateral partners and multilateral institutions. Continued monitoring of borrowing levels, the composition of assistance and the use of external resources will remain important for assessing the country’s fiscal position and broader economic outlook.
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