Pakistan witnessed a significant uptick in external financing during March 2025, securing a total of $555.2 million, according to the latest monthly report released by the Economic Affairs Division. The figure marks a 52.5% increase from February and a substantial 154% rise compared to the same month last year, showcasing growing engagement from global financial partners.
However, despite this sharp increase, cumulative external inflows for the first nine months of fiscal year 2024–25 (9MFY25) reached only $5.2 billion—representing just 27% of the government’s full-year external financing target of $19.39 billion. For comparison, in the previous fiscal year, the government had set a slightly lower goal of $17.62 billion and ended up raising $9.81 billion, still falling short of its projections.
Breaking down the March inflows, Pakistan received $343.68 million in loans and $15.39 million in grants. A significant portion of this funding came from multilateral and bilateral sources, totaling $359.07 million for the month. Multilateral institutions contributed $336.71 million, while bilateral partners added $22.36 million. In total, disbursements from these development partners reached $3.19 billion over the first nine months of FY25.
One of the standout figures in the latest data is the country’s foreign commercial borrowing, which stood at $140.46 million for March and reached $1.46 billion cumulatively for 9MFY25. Interestingly, these funds were raised entirely through the issuance of Naya Pakistan Certificates—a financial instrument designed to attract investments from overseas Pakistanis. However, no funding was secured from foreign commercial banks during the same period, despite a sizable full-year borrowing target of $3.78 billion from this channel.
The data also emphasizes Pakistan’s continuing dependence on non-project aid to manage its fiscal operations. Of the total inflows in March, $319.15 million was categorized as non-project aid, primarily intended for budgetary support. This form of financing has emerged as a critical component for Pakistan’s macroeconomic stability, contributing a cumulative $3.07 billion during the current fiscal year’s first nine months.
The increased reliance on external budgetary support underscores the government’s ongoing struggle to meet its financing needs through domestic revenue or project-linked funding. While the March spike in inflows offers some relief, the broader picture indicates a significant shortfall in external financing, which could pose challenges for budget planning, currency stability, and investor confidence.
As the fiscal year enters its final quarter, the government faces mounting pressure to accelerate its fundraising efforts, particularly from foreign commercial lenders and multilateral institutions, to bridge the financing gap and support its economic reform agenda. The upcoming months will be crucial in determining whether Pakistan can meet—or at least approach—its ambitious external financing goals for FY25.