Pakistan Sees Strong Boost in Multilateral Funding in July 2025
Islamabad, August 26, 2025 — Pakistan has witnessed a remarkable upswing in foreign financing at the onset of fiscal year 2026 (July–June), with inflows from multilateral lenders climbing by nearly 59% compared to July 2024. Total foreign loans in July reached $695 million, up from $436.4 million a year earlier (Geo News).
Funding Breakdown
- Multilateral Disbursements:
- World Bank (IDA): $157.69 million
- World Bank (IBRD): $52.56 million
- Islamic Development Bank (IsDB): $131.20 million
- Asian Development Bank (ADB): $33.22 million
- Total multilateral: $379.88 million (Geo News)
- Saudi Oil Facility (SOF):
Pakistan also secured $100 million under the SOF, part of a larger $1 billion facility expected to continue through April 2026 (Geo News). - Bilateral Aid from Friendly Nations (totaling approx. $118.4 million):
- Saudi Arabia (via SOF): included above
- China: $6 million
- France: $8.5 million
- Germany: $2.02 million
- Japan: $0.81 million
- Korea: $0.6 million
- USA: $0.19 million (Geo News)
Context & Forward Look
The inflow—although still small in the context of the $19.7 billion in total foreign loans and grants projected for FY26—signals early momentum in Pakistan’s external financing strategy (Geo News). The government has set up a high-powered committee, led by Deputy Prime Minister Ishaq Dar, to finalize nominations for executive director positions at the World Bank and the ADB, underscoring efforts to secure greater institutional involvement (Geo News).
Pakistan is anticipating $410 million in disbursements under the IMF’s Resilience and Sustainability Facility (RSF), part of a $1.4 billion climate-finance package over 28 months (Geo News). In contrast, IMF funding under the Extended Fund Facility (EFF) is managed separately through the State Bank of Pakistan and not reflected in EAD records (Geo News).
Why This Matters
- Critical early boost: July’s funding demonstrates Pakistan’s ability to tap into international multilateral and bilateral credit lines effectively—vital for liquidity at the start of FY26.
- Commitment to reform: Sustained engagement with institutions like the World Bank, ADB, IMF, and IsDB reflects Islamabad’s reform trajectory and alignment with global norms.
- Strategic diversification: With inflows from diverse lenders—from climate finance to oil facilities—Pakistan is seeking a balanced external funding structure.
At-a-Glance Summary
| Category | Amount (July 2025) |
|---|---|
| Total Foreign Loans | $695 million |
| Multilateral Funding | $379.88 million |
| — World Bank (IDA) | $157.69 million |
| — World Bank (IBRD) | $52.56 million |
| — Islamic Dev. Bank | $131.20 million |
| — ADB | $33.22 million |
| Saudi Oil Facility (SOF) | $100 million |
| Bilateral from Friendlies | ~$18.4 million |
(Note: Bilateral total includes contributions excluding the SOF amount)
Pakistan’s strong start to FY26 in external financing highlights both international confidence and domestic fiscal readiness. Continued focus on institutional reform and strategic engagement will be key to maintaining this upward trajectory.
