Govt paid $11.8bn in debt servicing in FY20

[Path-Finder]

Pakistan requires a sharp decline in the current account deficit in FY20 and a surplus of $424 million in July next year to counter pressure from high debt servicing costs

The government paid $11.895 billion in external public debt servicing during 2019-20, as per the latest data released by the State Bank of Pakistan (SBP) on Wednesday.

This amount is 23 per cent higher than the debt servicing amount paid in 2018-19, which was $9.645 billion.

Out of the $11.895 billion paid this year, the SBP data shows $9.543 billion as principal for public debt and $2.352 billion in interest. Out of the total amount $10.71 billion were given as payments to multilateral commercial loans etc. while $904 million of these were paid to the International Monetary Fund (IMF) and $820 million were spent on meeting foreign exchange liabilities.

This rise in the cost of public debt and debt servicing can cause major problems for the government exchequer, but to counter this Pakistan will require a sharp decline in the current account deficit in FY20 and a surplus of $424 million in July next year to strengthen the external account.

The SBP data also showed that the total principal amount of long-term debt was around $14.578bn which was paid as debt servicing while the interest included in it was $3.233bn.

The total external debt and liabilities rose for the fiscal year 2020 amount to $112.8 billion, up from $106.3 billion in 2019.

Govt paid $11.8bn in debt servicing in FY20

KARACHI: The government paid $11.895 billion in external public debt servicing during 2019-20, as per the latest data released by the State Bank of Pakistan (SBP) on Wednesday.This amount is 23 pe

profit.pakistantoday.com.pk

 

[El Sidd]

Pakistan is the only country in the world repaying loans and debts. It's unconstitutional to pay the interest on these

 

[Path-Finder]

Pakistan is the only country in the world repaying loans and debts. It's unconstitutional to pay the interest on these

maybe you can tell dar that!

 

[CrazyZ]

Pakistan is the only country in the world repaying loans and debts. It's unconstitutional to pay the interest on these

Its all about cash flow for national governments. Do you have enough revenues to service the debt payments. No government in history has paid off its debts. Sovereigns relay on increasing the money supply to make repayment in the future easier. Extreme case is debt monetization. We are currently seeing a massive show of this all over the world.

Unfortunately for Pakistan, we have a lot of debts in dollars which we cant debase. Good thing is that USA federal reserve is doing that for us. We just need to make sure we are as fiscally responsible as possible (tough with a pandemic), meet our cash flow obligations, boost exports plus encourage foreign investment to get dollars.

 

[KhanBaba2]

Pakistan is the only country in the world repaying loans and debts. It's unconstitutional to pay the interest on these

It's unconstitutional to take loans on which you have to pay interest.