Pakistan has to return $10 billion foreign debt during the current fiscal year
ISLAMABAD: On Thursday, Hammad Azhar, Minister for Economic Affairs, stated in front of the National Assembly that the government would return $10 billion foreign debt during the current fiscal year.
Answering numerous questions during the Question Hour, the minister revealed that the incumbent government returned a total amount of US $8.39 billion from August 18, 2018, to June 30th of the current year. He said that the government collected $7.1 billion foreign loans during the mentioned time period.
As per the minister, the previous government obtained a loan on the short term during the last two years of its tenure in authority, they had to return the loan. He also said that the foreign debt was $73.1 billion in August 2018.
While answering a question, he stated that the debt to GDP ratio had surpassed its limit during the incumbency of the previous government. However, he said that the current PTI-led government was trying to bring it to the limit prescribed. During the tenure of the present government, the external debt was only $2.3 billion.
Minister Hammad Azhar said that the government had cleared a record of Rs.145 billion refund cases. He revealed that the external debt of Pakistan was a whopping Rs. 10,838 billion till May 2019.
To resolve this economic problem, the government was initiating a brief and comprehensive set of economic and structural reforms that focused specifically on export, reviving fiscal stability and bettering governance in key utilities and enterprises owned by the state.
Addressing the devaluation of Pakistani rupee, the minister stated that the current movement in exchange rate showed resolution of macroeconomic irregularities and imbalances that piled up over the past few years when the rupee was overvalued, the enlarged demand for imported goods led to increasing of the current account deficit to levels that were unmanageable. It put a great deal of pressure on the foreign exchange reserves.
Due to the demand-supply gap in the foreign exchange market, the rupee fell by 13.7% in FY 18 and 24.1% in FY 19.
He further stated that Pakistan’s this year’s exchange rate regime was market-oriented and flexible. The State Bank, on the other hand, was fully committed to addressing the out of order market behavior.