Pakistan Receives $5.45 Billion in Foreign Assistance in Three Months, Mostly Through Bonds
Pakistan received approximately $5.45 billion in foreign economic assistance during the first quarter of fiscal year 2026–27, with international bonds accounting for the largest share of the inflows, according to data from the Economic Affairs Division (EAD).
The total covers July to September 2026 and represents a substantial increase from the approximately $1.81 billion recorded during the same period a year earlier. The latest figures highlight the government’s continued reliance on external financing to support its budget and meet broader financing requirements.
International bondholders provided nearly $2.95 billion during the quarter, while other sources included the Naya Pakistan Certificates programme, commercial banks, and multilateral and bilateral development partners.
Pakistan’s Foreign Financing Rises Sharply
According to the EAD figures reported on October 20–21, Pakistan received $5.445 billion in foreign economic assistance in the first quarter, compared with $1.815 billion in the corresponding period of FY2025–26.
| Indicator | July–September 2026 |
|---|---|
| Total foreign economic assistance | $5.445 billion |
| Same period a year earlier | $1.815 billion |
| Year-on-year increase | Approximately 200% |
| International bondholder financing | $2.949 billion |
| Naya Pakistan Certificates | $942.71 million |
| Commercial bank financing | $300 million |
| Multilateral loans and grants | $894.17 million |
| Bilateral loans and grants | $58.10 million |
The increase reflects a larger volume of external financing during the quarter. However, total foreign economic assistance includes different forms of financing and grants, so it should not be treated as a single new loan or as a direct measure of the change in Pakistan’s total external debt.
International Bonds Account for the Largest Share
International bondholders were the largest reported source of foreign economic assistance, contributing approximately $2.95 billion during the three-month period.
Separate reporting on government documents said Pakistan issued $3 billion in bonds in September. The issuance comprised two tranches: $1.75 billion carrying a reported interest rate of 7.5%, and $1.25 billion at 7.9%. Both were reported to mature in 2036.
The proceeds were intended to support government financing needs. The bond issuance provides funding in the near term, but it also creates future repayment obligations and interest costs.
The difference between the reported $3 billion issuance and the EAD’s $2.949 billion figure may reflect differences in reporting or recording. The figures should therefore be attributed to their respective sources rather than assumed to be identical measures.
Other Sources of External Financing
Pakistan’s external financing during the quarter also came from several other channels.
Naya Pakistan Certificates
The government received approximately $942.71 million through the Naya Pakistan Certificates programme. These certificates allow eligible overseas Pakistanis and other qualifying investors to place funds in government-backed investment instruments.
Although this programme provides access to foreign-currency funding, certificates represent financial obligations to investors rather than grants.
Commercial banks
Commercial bank financing contributed around $300 million during the quarter. The government also secured a reported medium-term facility of that value from an international commercial bank.
Multilateral institutions
Multilateral lenders and development institutions provided approximately $894.17 million in loans and grants. Reported contributors included:
| Institution | Reported financing |
|---|---|
| International Development Association (IDA) | $359.04 million |
| Asian Development Bank (ADB) | $153.55 million |
| International Bank for Reconstruction and Development (IBRD) | $83.79 million |
| Asian Infrastructure Investment Bank (AIIB) | $26.05 million |
| Islamic Development Bank | $28.27 million |
| Islamic Development Bank short-term facility | $238.44 million |
| International Fund for Agricultural Development (IFAD) | $3.87 million |
These institutions finance a range of development, reform and budget-related activities. The precise terms and purposes of individual facilities vary.
Bilateral partners
Bilateral loans and grants amounted to approximately $58.10 million in the reported figures. Contributions included $20 million from France, $14.69 million from Germany, $12.87 million from Saudi Arabia, and smaller amounts from South Korea, Japan and other partners.
China also provided separately reported guaranteed bilateral financing of approximately $305.53 million. Because financing categories can be presented differently across government documents, this figure should not simply be added to the headline total without checking the EAD’s accounting classification.
Most Financing Was Not Linked to Specific Projects
The EAD data indicate that most of the foreign economic assistance was classified as non-project financing.
| Financing category | Reported amount |
|---|---|
| Non-project financing | $4.541 billion |
| Project-related financing | $907.71 million |
| Budgetary support | $4.192 billion |
| Programme financing | $111.63 million |
| Short-term Islamic Development Bank financing | $238.44 million |
Non-project financing can provide the government with funds for broader budgetary and economic needs rather than being tied to a particular infrastructure or development project. Project financing, by contrast, is generally associated with specified programmes or investments.
The high proportion of non-project assistance indicates that external funds were largely directed toward broader financing requirements during the quarter.
What the Borrowing Means for Pakistan’s Economy
External financing can help a government meet immediate funding needs, maintain essential expenditure and support foreign-exchange liquidity. It can also provide time for reforms intended to improve revenue collection, exports and economic stability.
However, borrowing through international bonds and commercial facilities comes with repayment and interest obligations. These costs can put pressure on future budgets, particularly when a large portion of financing is raised on commercial terms.
The overall impact depends on the cost and maturity of each instrument, the use of the proceeds, the country’s capacity to earn foreign exchange and the government’s ability to manage future repayments.
The $5.45 billion headline figure also includes loans and grants from multiple sources. It should not be interpreted as a $5.45 billion increase in net external debt, because grants do not create debt and debt stocks can change for other reasons, including repayments and exchange-rate movements.
What to Watch in the Coming Months
Several indicators will help clarify the sustainability of Pakistan’s external financing position:
- Debt servicing: The principal and interest payments falling due on existing obligations.
- Foreign-exchange reserves: Whether reserves remain adequate to meet external payments and support market confidence.
- Borrowing costs: The interest rates and maturity terms attached to new bond and bank financing.
- Revenue and exports: Whether domestic revenue collection and foreign-exchange earnings improve sufficiently to reduce financing pressure.
- Development spending: Whether project-linked funding translates into completed infrastructure and measurable economic benefits.
The first-quarter data show that external financing inflows increased sharply. Whether this strengthens Pakistan’s medium-term position will depend on how the funds are used and whether the country can manage the resulting repayment commitments.
Editorial note: Figures in this article are based on Economic Affairs Division data reported by Pakistani media on October 20–21, 2026. Bond issuance figures and quarterly assistance totals come from different reporting categories and should be verified against the original government documents before publication.