ISLAMABAD – Pakistan had paid around $7 billion in shape of both principal and interest payment during first six months (July-December) period of the current financial year 2019-20.
The country had paid $1.65 billion as interest payment and $5.335 billion as principal amount making the total payment at $6.985 billion during July-December period, according to the latest figures of State Bank of Pakistan (SBP).
The breakup showed that country had paid $5.86 billion in shape of principal and interest payments against the public debt in first six months of the ongoing fiscal year.
The public debt included government debt, loan from International Monetary Fund (IMF) and foreign exchange liabilities.
The country had paid $2.419 billion against government debt, $207 million against IMF loans and $571 million against foreign exchange liabilities.
Furthermore, the country had repaid $135 million as loans and interest payment of public sector enterprises (PSEs) and $541 million against private sector loans.
The country’s loan repayment and interest payment is continuously increasing due to massive borrowing. Pakistan’s External Debt and Liabilities (EDL) had swelled to $111.047 billion till December 2019. Pakistan’s EDL ballooned to $111.047 billion till December 31, 2019 against $95.237 billion on June 30, 2018, indicating that the total EDL went up by $15.8 billion in the last 18 months from June 2018 to Dec 31, 2019.
Pakistan’s total debt and liabilities had increased to Rs41 trillion by December last year.
Meanwhile, the country’s debt to GDP ratio clinched to 94.1 percent of the GDP in Dec 2019 against 86.2 percent of GDP on December 31, 2018.
The federal government had recently submitted Debt Policy Statement 2019-20 in parliament.
The ministry of finance in the statement vowed to reduce the debt to GDP in next five years.
Beginning from the financial year 2018-19 total public debt shall be reduced by 0.5 percent every year and from 2023-24 and going up to financial year 2032-33 a reduction of 0.75 percent every year to reduce the total public debt to fifty percent of the estimated gross domestic product and thereafter maintaining it to fifty percent or less of the estimated gross domestic product.
Meanwhile, the government said that no new guarantees would be issued for rupee lending, bonds, rates of return, output purchase agreements and all other claims and commitments that may be prescribed, from time to time, for any amount exceeding two percent of the estimated gross domestic product in any financial year: Provided that the renewal of existing guarantees shall be considered as issuing a new guarantee.