ISLAMABAD: Pakistan’s total debt and liabilities have pushed up sharply and touched at Rs29.861 trillion or 86.8 percent of GDP till June 30, 2018 indicating that each individual living in the country owed Rs144256 on account of increasing debt burden, official data available with The News disclosed.
The external debt and liabilities (EDL) peaked to $95.097 billion on June 30, 2018, posing a serious threat for the country on repayment of its foreign obligations. The external debt servicing consumed $7.479 billion in last fiscal year 2017-18 including principle amount of $5.186 billion and interest payment of $2.293 billion. The EDL in percentage of GDP stands at 33.6 percent.
The rising debt and liabilities will be resulting into shrinking fiscal space for the government to meet requirements for all other important sectors as the debt servicing will now further eat up more resources collected on account of tax revenues in months and years ahead.
“The problem is too big which cannot be fixed without undertaking major adjustments. This monster cannot be resolved by getting loans as the government will have to reduce the yawning current account deficit by $7 to $8 billion to show its seriousness but the incoming government has not so far come up with solutions. They seem just relying on getting loans from friendly countries which will not solve our problems,” former minister for finance Dr Hafiz A Pasha told The News when contacted him on Wednesday.
He said the country’s current account deficit stood at $18 billion in last fiscal year and with the status quo approach it might surge to $21 billion.
“We have no other options but to take bold steps to slash down the current account deficit by $7 to $8 billion by increasing cash margins on imports, slapping increased tariff and taking steps to boost exports,” he added. He said that there was need to decrease energy prices for export industries but so far no steps were taken by the government even after winning elections in July 26 polls.
The State Bank of Pakistan (SBP) released data showed that the total debt and liabilities went up to Rs29.861 trillion on June 30, 2018 against Rs25.109 trillion till June 2017, indicating that the total debt increased by Rs4.752 trillion just alone in last financial year 2017-18.
Interestingly, the total debt and liabilities stood at Rs29.861 trillion till June 2018 but the total debt of the government in accordance with definition of Fiscal Responsibility and Debt Limitation Act (FRDLA) amended in June 2017 it stood at Rs23.050 trillion so there was difference of Rs6 trillion between the two definitions of debt.
Pakistan’s external debt and liabilities stood at $95.097 billion on June 2018 against $83.431 billion, witnessing a surge in EDL by $12 billion just in one fiscal year 2017-18. Of total debt and liabilities of Rs29,861 billion, the government domestic debt stood at Rs16415 billion, government’s external debt in rupee term Rs7795 billion, debt from IMF Rs740.8 billion, external liabilities Rs622.3 billion, private sector external liabilities Rs1600 billion, PSEs external debt Rs325 billion, PSEs domestic debt Rs1068 billion, commodity operation Rs819 billion and intercompany external debt Rs473 billion.
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