Pakistan Debt

[Patriot]

GoP broke all time record of securing (burring people in debt) more than $9 billion in loans (IMF, ADB, bilateral) from September of 2008 till May of 2009.

The foreign debt has risen from $36 billion to more than $45 billion in the same time period with excepted raise to $51 billion by September of 2009.

According to some economists, by 2012 the debt servicing will constitute 68% of total budget from a record low of 34% at the end of 2007.

LONG LIVE Zardari!

 

[PeacefulIndian]

LONG LIVE Zardari!

He is no visionary or extraordinary leader, but I think you are being grossly unfair to him here, by solely blaming him for the debt. Read this - months before he assumed power, the debt situation had already started worsening, after a good performance for about 6 years from 2001 to 2007.

Daily Times - Leading News Resource of Pakistan

 

[Jihad]

He is no visionary or extraordinary leader, but I think you are being grossly unfair to him here, by solely blaming him for the debt. Read this - months before he assumed power, the debt situation had already started worsening, after a good performance for about 6 years from 2001 to 2007.

Daily Times - Leading News Resource of Pakistan

Yes and who was in charge during those 6 years and before?
Democracy has brought us nothing, it has only given the Pakistani people false hope.

 

[ejaz007]

Pak total debt of 71 years up by 35pc in PTI govt’s 13 months

Listen

ISLAMABAD: Beating the PPP and PML-N regimes way behind, the PTI government during the first 13 months of its tenure has added almost 35 per cent of the total debt that Pakistan had accumulated in the previous 71 years of its independence.

Latest figures of State Bank of Pakistan show that Pakistan’s total debt and liabilities which were Rs29,879 billion on 30th June 2018 reached Rs41,489 billion on 30th September 2019. This increase in 15 months, which include a little over 13 months of PTI government, is 38.8%.

The SBP figures show that the Gross Public Debt, which was Rs24,952 billion on 30th June 2018 reached Rs34,240 billion on 30th September 2019.

The official figures show that the total debt and liabilities which were Rs40,223 billion in June 2019 have increased to Rs41,489 in the first quarter of the current fiscal year i.e. September 2019.

The Gross Public Debt which was Rs32,707 billion in June 2019 rose to Rs34,240 in September 2019. It means during the first three months of the present fiscal year, there is an addition of Rs1,266 billion to the country’s Gross Public Debt.

Addition of the debt of almost Rs23,000 billion during the ten years of last PPP and PML-N regimes - from 2008 to 2018 - has been repeatedly quoted by the prime minister as the real damage to Pakistan and its people. For the same reason, the Prime Minister Imran Khan also set up a Debt Commission to find out as to how much of this debt money (Rs23,000 billion) went into the pockets of the PPP and PML-N rulers.

However, to the dismay of many even in the government the Imran Khan government has already added the debt of over Rs10,000 billion in just 13 months of his tenure, which is over 40% of the total debt added in 10 years of the PPP and PML-N governments.

The figures show that the PTI government is adding up in the public debt stock in a much higher pace than what the last PML-N and PPP government had collectively added during their tenures.

Prime Minister Imran Khan and the PTI had been quoting the figure of Rs30,000 billion debt which had reached this level in June 2018 from Rs6,691 billion in 2007. The party is of the view that this phenomenal and alarming raise in debt from Rs6,691 billion in 2007 to Rs30,000 billion in June 2018 is the consequence of alleged corruption by the last PML-N and PPP governments, which ruled the country during this period.

The SBP figures relating to the total public debts and liabilities by end June 2013 (the year when PPP completed its tenure) were Rs16,228 billion. When the PML-N government left, the total debts and liabilities were almost Rs29,000 billion

A representative of the government, however, stated that the PTI government had to obtain loans to pay the loans taken by the previous governments. He said massive loans taken by the previous governments damaged the national economy enormously.

He said the previous government kept the exchange rate unchanged artificially which also badly affected the economy. The representative said the PTI government had no other option but to obtain more loans to pay the previous loans. He said had the PTI government not taken the loans, the country would have gone bankrupt. He said the difficult steps taken by the government will soon yield good results.

https://www.thenews.com.pk/print/57...f-71-years-up-by-35pc-in-pti-govt-s-13-months

 

[aasimanwaar]

Well all figures are in Ruppee that has to increase automatically with rise in dollar vs Ruppee.
Misleading is this article.

 

[ejaz007]

Well all figures are in Ruppee that has to increase automatically with rise in dollar vs Ruppee.
Misleading is this article.

How is the article misleading?

As per writer he has quoted State Bank figures. Prove that he has quoted wrong.

 

[Yaseen1]

the problem of debt is not limited to Pakistan,it is with almost all economies but we have to convert this debt to production in our economy by increasing real growth,reduction in debt through temporary measure will not benefit us in longrun,if you look at all big profitable companies they all remain indebted although they can pay back debt if they want but they take debts to increase their growth and to expand their operations ,this is common with all successful businessmen

 

[jupiter2007]

How is the article misleading?

As per writer he has quoted State Bank figures. Prove that he has quoted wrong.

Rupee value was different during PPP, PMLN and now during PTI government.

for example, you took loan of 100 dollars.
100 dollar loan when dollar value is 100 = Rs10,000
100 dollar loan when dollar value is 125 = Rs12,500
100 dollar loan when dollar value is 150 = Rs15,000

As the dollar value increases, loan amount will increase.

 

[ejaz007]

Rupee value was different during PPP, PMLN and now during PTI government.

for example, you took loan of 100 dollars.
100 dollar loan when dollar value is 100 = Rs10,000
100 dollar loan when dollar value is 125 = Rs12,500
100 dollar loan when dollar value is 150 = Rs15,000

As the dollar value increases, loan amount will increase.

It was government decision to devalue the rupee. Government knows that external debt increases with rupee devaluation.

 

[The Accountant]

It was government decision to devalue the rupee. Government knows that external debt increases with rupee devaluation.

It is not government decision. When your current account deficit is 19 billion dollars it means you have to take loan of 19 billion dollars to finance your import. 19 billion means 1900 billion rupees.

So current account deficit went up from 2 billion in 2015 to 19 billion in 2018. After Panama incident, NS and Dar threw Pakistan under the truck to ensure that Pakistan become bankrupt and put all the blame on next government.

Now things are moving in a positive direction and after 4 years October was the first month where we had current account surplus. Current account is difference between your external income and expense.

Rupee depreciated based on demand and supply principle i.e. more dollar were going out and hence value of dollar kept on decreasing. However, to hide the situation, rather than allowed to dollar increase, Dar started issuing dollars from SBP and resultantly our reserves decline from 23 billion dollars to 7 billion. This is similar to the example when you have lower income and expenses than rather to balance that out you start selling your house hold items. However, it was carefully planned to ensure that when PMLN left there are no reserves and only thing next government could do is to either declare Pakistan bankrupt or take more loan but in any of the cases rupee had to be depreciated to get export import balances so that current account deficit could be avoided

 

[Adil Khan Kakar]

Misleading article. Misleading thread.
Debt taken in rupees should be accounted separated from debt taken in dollars.
Current govt have paid highest amount of debt in shortest period.
Every macro economics indicator is getting better every day.
Inshallah, next govt will not have to go to IMF. This will be best selling point of PTI govt in next election

 

[ejaz007]

It is not government decision. When your current account deficit is 19 billion dollars it means you have to take loan of 19 billion dollars to finance your import. 19 billion means 1900 billion rupees.

So current account deficit went up from 2 billion in 2015 to 19 billion in 2018. After Panama incident, NS and Dar threw Pakistan under the truck to ensure that Pakistan become bankrupt and put all the blame on next government.

Now things are moving in a positive direction and after 4 years October was the first month where we had current account surplus. Current account is difference between your external income and expense.

Rupee depreciated based on demand and supply principle i.e. more dollar were going out and hence value of dollar kept on decreasing. However, to hide the situation, rather than allowed to dollar increase, Dar started issuing dollars from SBP and resultantly our reserves decline from 23 billion dollars to 7 billion. This is similar to the example when you have lower income and expenses than rather to balance that out you start selling your house hold items. However, it was carefully planned to ensure that when PMLN left there are no reserves and only thing next government could do is to either declare Pakistan bankrupt or take more loan but in any of the cases rupee had to be depreciated to get export import balances so that current account deficit could be avoided

Although I do not have economics background here is what I understand of the current account deficit problem in Pakistan. The current account deficit problem started when Musharaf was in power. He had the most favorable conditions to govern and could have done better. With considerable amount of dollars coming in as coalition support fund he could have managed the economy better.

Then came the PPP. Well not much needs to be said about them. I believe all financial indicators went down.

The only point which supports their performance is that terrorism was perhaps at its peak during their tenure and then there was judicial activism. What ever they did right or wrong ended up in court as suo moto after suo moto made governance very difficult. Some of the supreme court decisions had very bad impact on governance.

Then came PML (N). Although terrorism declined they faced a political instability. PTI backed by some institutions from 2014 onward was hell bent on ousting them. Then their were institutions who were not supportive of the government. Supreme court activism reached its peak and bureaucrats and government suffered a lot.

In short economic performance in some ways also depends on the political and stability factors persisting in the country. We have not been lucky in the fact that political stability has been lacking and what ever economic policies were formed right or wrong could not be implemented.

Current government after Musharaf is the only one supported by the institutions. As of today major economic indicators are not promising (except current account deficit). Lets wait and see what they can do.

This is my point of view and perhaps you would agree that economic policies alone are not needed political stability is also a factor. Even present government is wasting a lot of time focusing on issues which perhaps are not as important as economic condition of the country.

I found this article and think is worth reading:

https://www.dawn.com/news/1482443

Misleading article. Misleading thread.
Debt taken in rupees should be accounted separated from debt taken in dollars.
Current govt have paid highest amount of debt in shortest period.
Every macro economics indicator is getting better every day.
Inshallah, next govt will not have to go to IMF. This will be best selling point of PTI govt in next election

I believe all loans are ultimately converted in PKR.

 

[The Accountant]

Although I do not have economics background here is what I understand of the current account deficit problem in Pakistan. The current account deficit problem started when Musharaf was in power. He had the most favorable conditions to govern and could have done better. With considerable amount of dollars coming in as coalition support fund he could have managed the economy better.

Then came the PPP. Well not much needs to be said about them. I believe all financial indicators went down.

The only point which supports their performance is that terrorism was perhaps at its peak during their tenure and then there was judicial activism. What ever they did right or wrong ended up in court as suo moto after suo moto made governance very difficult. Some of the supreme court decisions had very bad impact on governance.

Then came PML (N). Although terrorism declined they faced a political instability. PTI backed by some institutions from 2014 onward was hell bent on ousting them. Then their were institutions who were not supportive of the government. Supreme court activism reached its peak and bureaucrats and government suffered a lot.

In short economic performance in some ways also depends on the political and stability factors persisting in the country. We have not been lucky in the fact that political stability has been lacking and what ever economic policies were formed right or wrong could not be implemented.

Current government after Musharaf is the only one supported by the institutions. As of today major economic indicators are not promising (except current account deficit). Lets wait and see what they can do.

This is my point of view and perhaps you would agree that economic policies alone are not needed political stability is also a factor. Even present government is wasting a lot of time focusing on issues which perhaps are not as important as economic condition of the country.

I found this article and think is worth reading:

https://www.dawn.com/news/1482443



I believe all loans are ultimately converted in PKR.

Wrong picture by dawn and the graph. The trade gap increased during musharaf rehime was on avcount of world oil crisis. Oil reached as high as 140 dollars. Thise were factors beyond control of Pakistan and eventually resulted in global economic crisis in 2008 ... oil rose again in 2011 but started devlining in 2013 again ... so despite oil prices remain historically low our imports remained historically high due to currency manupulayion of PMLN.

 

[ejaz007]

Wrong picture by dawn and the graph. The trade gap increased during musharaf rehime was on avcount of world oil crisis. Oil reached as high as 140 dollars. Thise were factors beyond control of Pakistan and eventually resulted in global economic crisis in 2008 ... oil rose again in 2011 but started devlining in 2013 again ... so despite oil prices remain historically low our imports remained historically high due to currency manupulayion of PMLN.


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As I understand not all imports are bad. Some infact might be necessary. For example import of material and parts used by manufacturers and industry might be beneficial. These add value to finished products and in turn earn foreign exchange in the form of exports.

It is the import of items such as luxury items which are harmful for economy. Unnecessary foreign exchange is wasted on these imports.

 

[The Accountant]

As I understand not all imports are bad. Some infact might be necessary. For example import of material and parts used by manufacturers and industry might be beneficial. These add value to finished products and in turn earn foreign exchange in the form of exports.

It is the import of items such as luxury items which are harmful for economy. Unnecessary foreign exchange is wasted on these imports.

Agreed. Do you want to see luxury imports. Kindly visit our parliament both national and provincial.

In 21st century the seventh biggest population of the world is importing engines. Even Steel is being imported rather than iron ore.

Consumables such as tea amounts to 400 million of import bill. Our nation classify tea as necessity. But is it a necessity?

More than imports it is about export. During PMLN tenure our supports declines significantly, from 25 billion dollars to 20 and then raised back upto 23 billion which is criminal negligence on part of PMLN economic team