How much foreign loan PTI government borrowed in one year? $1.3B or $10.4B

How much foreign loan PTI government borrowed in one year? $1.3B or $10.4B

ISLAMABAD - The Finance Division has termed as inaccurate and misleading a news report appearing in a section of the press contending that the government’s foreign borrowing increased by $10.4 billion from 18th August 2018 to 30th September 2019.

In an official statement released on Thursday, the Finance Division contended that the report was not only misleading but was also against the national interest as it sent erroneous signals to the markets, which could have had potentially negative consequences for Pakistan’s rapidly stabilising economy.

Earlier, a media outlet had reported that the government “has admitted to obtaining a total of $10.37 billion loans from different countries and international lenders until September 30, 2019”.

According to the report, Economic Affairs Minister Hammad Azhar had told the National Assembly that the Pakistan Tehreek-e-Insadf (PTI) government secured $10.37 billion from various governments and international institutions from August 14, 2018, to September 30, 2019.

“It is critical to understand that the figure of $10.4 billion is ‘gross inflows’ and does not take into account the debt retirement of $9.1 billion during the same period,” the Finance Division stated on Thursday.

“For the sake of clarity, it must be noted that reporting gross external debt inflows only presents one side of the picture, ignoring outflows on account of repayments, which are the other side of the picture, and a prerequisite to calculate the net or actual increase in external indebtedness of the country.”

The statement further noted that while gross external public debt disbursement was $10.4 billion during 18th August 2018 to 30th September 2019, deducting the $9.1 billion which the government paid back during the said period leaves a net figure of $1.3 billion.

“Therefore, the real addition in external public debt under the present government was $1.3 billion, not $10.4 billion as claimed by a section of the press,” it added.