Pakistan’s external debt set to grow to whopping $90b

[mr42O]

ISLAMABAD:
Pakistan’s external debt is projected to grow to a whopping $90 billion in the next four years and the country will need $20 billion a year just to meet its external financing requirements amid concerns that all constitutional arrangements put in place to manage debt have become ineffective.

The external debt figures compiled by renowned economist and the country’s former finance minister Dr Hafiz Pasha are about $14 billion higher than the projections made by the International Monetary Fund.

Moody’s report: International bonds weaken Pakistan’s debt affordability

Dr Pasha on Saturday shared his doomsday scenario in a National Debt Conference, arranged by the Policy Research Institute of Market Economy (PRIME) – an independent think tank.

Dr Pasha’s projections are based on official data. The $14 billion difference was mainly on account of foreign loans that will fly in to finance China Pakistan Economic Corridor (CPEC) projects. The government is not including CPEC loans in total public debt.

“At the moment, we do not have details about the loans that will be taken under the CPEC,” said Ehtesham Rashid, Director General of the Debt Office at the Ministry of Finance, while responding to these projections.

He said once details are available, the Office may have to re-do the entire debt management strategy.

There is enormous support for the CPEC in Pakistan but this game-changing corridor has financial implications for the country that have to be highlighted for better management of debt, said Dr Pasha. His comments come after State Bank of Pakistan governor Ashraf Wathra in an interview last week said there was a need to divulge more details on the debt and investment portions of CPEC, stressing the need for more transparency on part of the government.

Dr Pasha said by 2018-19 amortisation payments would double to $8.3 billion. The current account deficit – the gap between external payments and receipts – will exponentially widen to 4% of the total size of the economy against this year’s level of just under 1% of GDP, he said.

Pakistan to get another $502m IMF loan

The current account deficit will widen due to import of machinery and plants for CPEC projects, in addition to imported fuel like Liquefied Natural Gas and coal.

As against IMF’s projections of just $8.6 billion requirement, Dr Pasha said that total external financing needs, including bridging the current account deficit and repayment of loans, will alarmingly triple to $20 billion by 2018-19.

“This will push the total external debt to $90 billion by 2018-19, showing a growth of 38% over current volume of the foreign debt of over $65 billion,” said Dr Pasha.

He said Pakistan’s exports would have to improve to at least $36 billion if the alarming increase in debt was to be arrested. The country’s exports currently hover around the $24-billion mark.

Constitutional arrangements

The constitutional arrangements put in place to better manage debt are not effectively working as there is hardly any serious debate in the Council of Common Interests and National Economic Council on the debt issue, said Abdul Wajid Rana, former Secretary Finance. He said the Debt Management Office has become subservient to Secretary Finance and was not autonomous.

Transparency

Sakib Sherani, former Principal Economic Advisor to Ministry of Finance, said that the government was playing with debt numbers. His comments come after the government’s decision to exclude non-plan loans from public debt.

He said the debt-to-GDP ratio has become irrelevant in case of Pakistan as the country lacks the capacity to repay the debt even at its current 65% level of debt-to-GDP ratio.

Pakistan agrees to slap billions in new taxes

“In case of Pakistan, the debt-to-revenue ratio is more relevant. 350% would be the limit, beyond which it wouldn’t be sustainable. Currently, this ratio stands at an alarming 523%,” said Sherani.

“By 2018-19, the debt-to-revenue ratio will be over 750%,” said Dr Pasha.

In order to ensure transparency, there must be a law requiring government to take parliamentary approval of any deal signed with the foreign governments and lending agencies, said Dr Kaiser Bengali, an economic consultant to government of Balochistan.

Published in The Express Tribune, December 13th, 2015.

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http://tribune.com.pk/story/1009032...ns-external-debt-set-to-grow-to-whopping-90b/

 

[hacker J]

pak should also focus on internal income tax agencies to collect taxes as much as possible and encourage industrialisation to insure more of country fund rather than depending on loans for development

 

[kmc_chacko]

pak should also focus on internal income tax agencies to collect taxes as much as possible and encourage industrialisation to insure more of country fund rather than depending on loans for development

It's nearly 2 month old news. I think GoP has already taken initiative. They have presented interim budget to overcome that

Tax growth up by 33%, Budget deficit down to 4.3 percent, says Dar

as per Daily Pakistan Global

 

[Tipu7]

 

[Viper0011.]

ISLAMABAD:
Pakistan’s external debt is projected to grow to a whopping $90 billion in the next four years and the country will need $20 billion a year just to meet its external financing requirements amid concerns that all constitutional arrangements put in place to manage debt have become ineffective.

The external debt figures compiled by renowned economist and the country’s former finance minister Dr Hafiz Pasha are about $14 billion higher than the projections made by the International Monetary Fund./

OF COURSE this article would belong to the paid media campaign and posted by fools from the lie-clan of IK!!!!! Yet ANOTHER propaganda article paid for by "the IK" Hitler like campaign built on lying.

1) The Debt goes up when there are less taxes being paid. Check your own books and your forefathers and find out how much tax you owe to your country and pay it. THEN post these articles.
A country with 220 million population has less then 2% tax payers!!!!!! And you wonder why the debt is going up.

2) The Debt ALSO goes up when there are public welfare projects initiated. But since there are no tax system, the money has to come from somewhere. So this is a temporary increase in debt. When these projects start by 2018 and become operational, the revenue generated will go back to paying debt. Not a big deal. If there was nothing being done and the debt was going up, then there is a problem.

3) Pakistani stock market and real estate markets are going VERY strong. Two of the MAJOR indicators of a country's economy strengthening. So there is no danger of bankruptcy or anything. I guess fools like you, like that 2012's $ 11 million in bank account and bankruptcy being prepared, vs, today, with a high growth economy and prospects for millions of better jobs and other business and employment opportunities.

4) How about someone write about "some" progress made in the KPK????? Outside of drama, threats, "I don't want to cooperate with the Central government"?? There isn't much there to write or talk about is there? Launching two hospitals in three years and a $ 200K website to "provide information to people", while the hospitals are run by people who aren't even doctors, and the rich rule and the poor still stick to their guns, isn't "progress", its called a waste of votes. But their greeder is greedy to be a PM without having 10% of the ability, sense or progress shown from wherever he won from!!!! Lie, verbal threats, bad marketing, rigging, wrong elections, all things negative and violent in Pakistan equate to IK's failed politics that people hate.

Come back in 2018, with a progress report from both the government of Pakistan, Punjab, Sindh, Baluchistan AND KPK. You'll be shocked to see how there was nothing done in KPK (you can tell that today)!!!!!! Till then, stop writing crap and propaganda!!

It's nearly 2 month old news. I think GoP has already taken initiative. They have presented interim budget to overcome that

Tax growth up by 33%, Budget deficit down to 4.3 percent, says Dar

as per Daily Pakistan Global

I once tried to sit down in front of a horse and tried to teach him basic concepts of economy and GDP, etc. At the end, the horse got upset and hit one of his foots on the ground, kicked some dust and said "nayhaaahaaaaaaa".

You are doing something similar. These articles are written by paid journalists, who probably never finished a basic bachelor's degree, let alone a serious degree in Journalism. So these kind of crappy posts is what you get from them when people like IK pay them. He spent 1 billion rupees on the media to pay millions to corrupt journalists. What do you expect? There is a paid team working on here that posts these crappy, low quality articles.

Have you seen one article against IK where someone call him out and said, hey you idiot, you were given an ENTIRE province, what the hell have you done there? There is no such thing. The guy's made less progress than ants who build their house inside the ground from scratch. And he's supposed to be a leader of a big political party but he breaks his own constitution and attacks the parliament and does violence!!!!! That's a way to go!

View attachment 290846

Keep the green as green. Highlight the KPK area and put it in red and write "No Progress Made in THREE Full Years". These people are too busy in bringing down the entire progress being made to grow Pakistan's economy, versus, doing their job to grow their own province. These negative politics, bullshiit articles, paid journalism and violence type mentality that IK and followers have, has ONLY damaged your country and will divide it into pieces if this fool ever came to power ( minus 200% chance, as people see through bullshiit).

So re-post the map. Show the real problem Pakistan has. Its a group running KPK who isn't even qualified and hasn't done jack for the country. Here is a representation of progress in Pakistan. Remind you, the Western countries invest into it. Its a great site for stock market analysis!!!

http://seekingalpha.com/article/2133273-pakistans-weight-in-this-etf-is-set-to-soar

 

[Tshering22]

Even at $90 billion, the % of your external debt is much lower than a lot of developed countries.

You can still make a recovery.

 

[Zibago]

Folks paid by Mariyam Nawaz are back yeah

To them all who oppose funder and financer of terror is an army paid mango juice agent

 

[Super Falcon]

View attachment 290846

Agreed the democracy parliment leaders constitution of pak have nothing to do with common pakistani issues if u look parlimebt devate they talk issues only for saving their butts and not to forget pak judicery too

 

[Archie]

Conduct raids on Bilawal House and Raiwind Mahal

I am sure you can find a few Billion USDs to pay off this debt

 

[true]

90 billion is a relatively small amount tbh , i did a quick comparison . Pakistan can recover from it if it develops its economy , i think china has some tough time ahead

 

[flamer84]

Even at $90 billion, the % of your external debt is much lower than a lot of developed countries.

You can still make a recovery.

That's just it....those are DEVELOPED countries ! Having this debt when you're so underdeveloped like Pakistan is a catastrophy.

 

[marbella]

You gotta read haqs musings to be hopeful, calm down and know actual state of economy.

 

[Taimoor Khan]

As it has been raised by some concerned quarters, this rising debt, thanks to the economic hitmen in present and previous "democratic" regimes , will eventually be used by forigen powers to negotiate Pakistan's nukes .

 

[Tshering22]

That's just it....those are DEVELOPED countries ! Having this debt when you're so underdeveloped like Pakistan is a catastrophy.

And what do you propose of PIIGS countries in Europe that are nearly dead? They are still developed with more than 30% populations jobless, industries weak and a whole set of problems, only Spain showing some hope.

The point is, one has to be able to afford to return the debt regardless of what state your country is classified.

 

[Talwar e Pakistan]

pak should also focus on internal income tax agencies to collect taxes as much as possible and encourage industrialisation to insure more of country fund rather than depending on loans for development

Not to mention 40% of our economy is not recorded. That can either be a good thing or a bad thing.