Pakistan external debt and liabilities increase tremendously in last 3 years
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ISLAMABAD: Federal government presented the Debt Policy Statement 2016-17 on Monday in the National Assembly, which was the first statement after the introduction of sweeping changes in the Fiscal Responsibility and Debt Limitation (FRDL) Act of 2005 in June last year.
The external debt-to-foreign exchange earnings ratio increased to 1.1 times, showing that Pakistan’s debt-bearing capacity weakened by the end of last fiscal year.
It is for the first time since 2012 that the ratio has weakened. In the past three years, it had remained stable, although the government excluded liabilities from the comparison last year.
Similarly, the external debt-to-gross domestic product ratio weakened from 18.8% to 20.4%.
The public debt-to-government revenue ratio stood at 442.5% against the generally acceptable threshold of 350%. This means less resources are available for spending on human resources and development.
Total external debt and liabilities rose 14.6% to $74.6 billion by September last year, according to the statement. The external debt and liabilities were at $61.4 billion in June 2015. In the external debt, the public debt rose to $58.7 billion.
