ISLAMABAD: The government of Pakistan signed new agreements worth $2.166 billion as commitments in the period July-Mar 2023-24, says the Economic Affairs Division (EAD).

Official data revealed that World Bank committed $888 million (41 percent of multilateral partners), Asian Development Bank (ADB) committed $706 million (33 per cent of multilateral partners), and the AIIB committed $250 million (12 per cent of multilateral partners).

The Division stated that a prudent external debt management strategy coupled with strong institutional arrangements is necessary for managing the external debt and improving the repayment capacity of the country. Debt can be productive if it is used for creating assets that generate positive returns and externalities.

Borrowing can be productive for economic growth of developing countries as long as the economic returns are higher than the cost of borrowed funds. While external debt is useful for the growth of the economy, dependence on external debt must be closely monitored and managed, the EAD added.

From July-March 2023-24, disbursements of $6.904 billion were mainly under the project and program loans/ grants from multilateral development partners, bilateral development partners and international financial institutions (IFIs). The World Bank, ADB and AIIB were the largest contributors among multilateral development partners contributing US$ 1,482 million, US$ 666 million and US$ 304 million respectively. On the bilateral side, Saudi Arabia emerged as the primary contributor to the total disbursements during the specified period disbursing US$ 657 million followed by China with US$ 576 million disbursement.

During the period Jul-Mar 2023-24, the share of disbursements under energy and power were US$ 404 million, floods-2022 US$ 234 million, construction US$ 200 million, agriculture US$ 155 million, transport and communication US$ 154, health and nutrition US$ 144 million, governance research and statistics US$ 105 million, water US$ 97 million, and physical planning and housing US$ 61 million in the total project assistance.

As of 31st March 2024, Pakistan’s total external public debt amounted to US$ 86,683 million. The government paid US$ 8,086 million during the period July-March 2023-2024 on account of debt servicing of external public loans. Of this, principal repayments were US$ 5,363 million and interest payments were US$ 2,723 million.

Furthermore, the net transfers to the government’s external public debt resulted in a positive balance, amounting to US$ 909 million.—TAHIR AMIN