• Sunday, August 25, 2019

Pakistan 's external debt, liabilities hit record $73 BILLION dollars level

Discussion in 'Pakistan Economy' started by cricketrulez, Aug 29, 2016.

  1. cricketrulez

    cricketrulez FULL MEMBER

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    https://www.thenews.com.pk/print/145852-Alarm-bells

    Capital suggestion

    Power sector: For the first time ever in our long chequered history, receivables in the power sector have crossed Rs684 billion. In 2012, when the OPEC Basket Price stood at $109 per barrel, the PPP government claimed that the multi-billion rupee circular debt was because of the high price of oil. In 2013, the newly formed PML-N government, after paying off a colossal Rs480 billion, claimed that the menace of circular debt has been buried for all times to come.

    OPEC Basket Price, a gift of God for the PML-N, now stands at $45 a barrel, a decline of nearly 60 percent. Clearly, our power sector terror has little to do with the international price of oil. Clearly, our power sector terror is a domestic governance issue – and the PML-N has not been able to control it. Lo and behold, no one in the official circles is alarmed.

    Remittances: In July 2015, overseas Pakistani workers remitted back $1.66 billion. In July 2016, the same went down to $1.33 billion; a hefty 20 percent decline. Our economy literally dwells on hard currency remittances by our workers aboard. A 20 percent decline should, therefore, be ringing alarm bells all over but the State Bank of Pakistan (SBP) remains complacent.

    An estimated 1.5 million Pakistani workers in Saudi Arabia send back nearly $6 billion a year. The Bin Laden Group, the largest construction conglomerate in Saudi Arabia, has laid off 25 percent of its work force. Potentially, a couple of hundred thousand Pakistani workers could be sent back amounting to a $2 billion yearly loss from Saudi Arabia alone.

    The SBP’s July remittance data is scary. Remittances from the UK are down 38 percent, perhaps a Brexit fallout. And remittances from the US are down 34 percent (yet unexplained). Lo and behold, no one in the official circles is alarmed.

    Exports: In July 2013, the first month of the PML-N government, our exports stood at $2.1 billion. Last month, our exports amounted to $1.5 billion; an alarming 30 percent decline. Lo and behold, our export target, set under the Strategic Trade Framework 2015-18, is $35 billion (remember, we failed to achieve the $24 billion export target set for FY 2016).

    Foreign Investment: In 2014, total foreign investment was recorded at $4.4 billion. In 2015, the same fell to $2.7 billion and the SBP’s provisional figure for 2016 stands at a paltry $952 million. That’s a decline of 77 percent since 2014. Lo and behold, no one in the official circles is alarmed.


    Debt: In June 2015, our total debt and liabilities stood at Rs19.8 trillion. The SBP’s figure for 2016 stands at Rs22.4 trillion. In dollar terms, our total debt and liabilities have gone up by an alarming $26 billion in just one year. To be certain, this trend is not sustainable. Lo and behold, no one in the official circles is alarmed.
     
  2. -xXx-

    -xXx- BANNED

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    Debts are fine till they are invested in some assets which will give higher returns in future.

    So the question I would have is where was this debt invested?
     
  3. Stephen Cohen

    Stephen Cohen BANNED

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    A large part of the new debt is for repaying old debts

    Some of it is investment in new assets especially roads and power projects

    But the problem is that Pakistan is unable to EARN enough dollars

    Hence the loans
     
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  4. -xXx-

    -xXx- BANNED

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    That's weird.

    If you take debt to repay debt and you actually do, it cancel out in your balance sheet.

    Power projects and infra should result in future returns.

    I am worried by bad debt.
     
  5. Stephen Cohen

    Stephen Cohen BANNED

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    http://www.dawn.com/news/1280413
    Repatriation of profits rises almost threefold

    During the preceding fiscal year, the amount of profits repatriated by foreign companies operating in Pakistan stood at $2 billion, which was the second biggest payment after debt servicing for the country.

    This figure speaks of Total debt -- Internal and external

    Internal debt is OK ; it is in rupees ; not in dollars ; it can be repaid

    The external debt is increasing at the rate of 7 to 8 billion dollars per year
     
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  6. BABA AGHORI

    BABA AGHORI BANNED

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    Bigger problem is when you take debt to repay older debt ... the new debt is always on higher rate of interest... and then circular debt follows...
     
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    -xXx- BANNED

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    Valid point but in long run.

    With immediate effect, if you pay debt by taking debt, it balances out and must not add substantially to your pending debt.
     
  8. Talwar e Pakistan

    Talwar e Pakistan SENIOR MEMBER

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    This is a pretty healthy figure for our growing economy, nothing to be worried about.
     
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  9. cricketrulez

    cricketrulez FULL MEMBER

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  10. BABA AGHORI

    BABA AGHORI BANNED

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    This is just trouble invading tactics and is like playing with fire next to a petrol can, in long run the brunt will be more severe.
     
  11. Furqan Sarwar

    Furqan Sarwar FULL MEMBER

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    Plz don't do bowling, Batting, Fielding all by your self8-). You guys will get tired.

    You should Invite some of the Top Players from our side as well so that the Match should become interesting....:-)
     
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  12. 4GTejasBVR

    4GTejasBVR BANNED

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    Does it counts CPEC also?
     
  13. Imran Khan

    Imran Khan PDF VETERAN

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    hum se ziada tension inko hai bhai hamsaya ho t aysa :D
     
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  14. AnnoyingOrange

    AnnoyingOrange BANNED

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    Bhai... countries don't have privilege of filing Bankruptcy... there are Millions of lives at stake... its about time Pakistanis took their national debt seriously.. as of now every Pakistani is Indebted by PKR 125000 at the time of his birth.
     
  15. GenerallyKhan

    GenerallyKhan FULL MEMBER

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    :omghaha: