*ISLAMABAD: *The ever increasing foreign loans are bleeding Pakistan’seconomy as larger amount of the budget has been allocated to the foreigndebt servicing.

The federal government will spend Rs2.2 trillion on public debt retirementin the upcoming fiscal year 2018-19 including foreign loan repayments andpayment of interest on the huge debt pile.

It had estimated spending of Rs1.64 trillion on retiring and servicing thepublic debt in the outgoing financial year 2017-18, but actual expenditurejumped up to Rs1.95 trillion.

Total outlay for the FY19 budget is estimated at Rs5.932 trillion includingforeign loans and grants, which is 16.2% higher than the FY18 estimate. Ofthis, current expenditure is projected at Rs4.780 trillion and developmentexpenditure at Rs1.152 trillion.

Of the total expenditure, the government will spend Rs1.62 trillion onmark-up payment on the public debt. Out of that, Rs1.39 trillion will bespent on mark-up on domestic debt whereas Rs229.23 billion will be utilisedto pay mark-up on foreign debt.

From the current expenditure, the government will spend Rs601.75 billion onrepaying foreign loans in the next fiscal year.

For the outgoing year, an amount of Rs1.64 trillion had been earmarked topay the debt and mark-up on foreign and domestic loans, but the target waslater revised upwards to Rs1.95 trillion following increase in governmentborrowing.

Economists believe that pressure will mount on the already shrinkingforeign currency reserves with the huge debt servicing requirement infuture.