Farooq Awan

Budgetary support and balance of payments (BoP) financing constituted 51% of total foreign economic assistance disbursements received during July–June 2024-25, according to the Annual Report on Foreign Economic Assistance issued by the Ministry of Economic Affairs.

Out of total disbursements amounting to US$ 12,144 million during the fiscal year, US$ 6,221 million was obtained in the form of budgetary support and BoP financing. The report states that these inflows were directed toward strengthening foreign exchange reserves and supporting the country’s external financing position.

The report categorizes disbursements into four primary modes: budgetary support/BoP financing, program financing, project financing, and commodity financing. The mode-wise breakdown provides insight into how external inflows were utilized during 2024-25.

Program financing accounted for US$ 1,630 million, representing 13% of total disbursements. These funds were received primarily under reform-oriented programs supported by multilateral development partners and international financial institutions.

Project financing disbursements totaled US$ 3,541 million during the fiscal year, constituting 29% of overall disbursements. Project financing supports specific socio-economic and infrastructure development initiatives approved under federal and provincial frameworks.

Commodity financing accounted for US$ 752 million, representing 7% of total disbursements in 2024-25. According to the report, commodity financing is generally utilized for procurement needs, including crude oil arrangements under concessional facilities.

The report notes that disbursements during a fiscal year may reflect cumulative inflows against both newly signed and previously committed agreements, as project and program execution typically spans multiple years.

The Ministry of Economic Affairs records disbursement data through the Debt Management and Financial Analysis System (DMFAS), which tracks inflows from multilateral development partners, bilateral partners, foreign commercial banks and other financing instruments.

The mode-wise composition of disbursements highlights the relative share of stabilization-oriented financing compared to development-oriented financing. While US$ 3,541 million was directed toward project financing for sectoral development, a larger share—US$ 6,221 million—was received as budgetary and BoP support during the fiscal year.

The Annual Report on Foreign Economic Assistance 2024-25 presents this distribution as part of its assessment of external inflows.

Credit: INP-WealthPk