Islamabad: Pakistan’s debt level remained significantly above sustainable levels during the last fiscal year, which is a violation of the parliamentary law.
According to the details, the level of government debt of the Government of Pakistan remained significantly above sustainable levels during the last fiscal year, which is also a violation of the Parliament Act, while the main reason for this is interest payments, due to which a stable foreign exchange rate and other expenditure cuts could not prove beneficial.
This was stated in a review report issued by the Ministry of Finance. The report states that the government failed to bring the debt level to 56.75 percent of the total economic volume by the end of the last fiscal year, and that level was approved under the Parliamentary Act.
However, there is a responsibility to bring the debt level to 56 percent for the current fiscal year. According to the report, the level of government debt during the last fiscal year remained at 67.50 percent of the total economic volume.
The report points out that the interest rate in the country is continuously increasing and at present the interest rate has been kept at 22 percent by the Central Bank, due to which the federal government had to pay 820 billion rupees in interest alone in the last fiscal year, which was 250 billion or 43 percent compared to the previous fiscal year.
According to the report, the total government debt increased by 13 percent in the last fiscal year and has reached Rs 71.20 trillion, of which Rs 47.20 trillion is local debt while Rs 24.10 trillion is external debt.
If we examine it in terms of the ratio of gross national product, the total debt rate decreases by 7 percent and by the end of the fiscal year it was up to 67.5 percent of GDP. Similarly, if we examine the volume of external debt, it also increases by 3 percent during the last fiscal year, however, its rate in total debt has decreased by 4 percent.
According to the Ministry of Finance, the government is looking for alternative sources of funding, including green sukuk and other bonds, and work is being done on issuing panda bonds for the Chinese market, but so far there has been no success in this.
The report was released after the World Bank raised objections to the transparency in identifying Pakistan’s debt situation.
When contacted, Finance Ministry spokesperson Qamar Abbasi said that the government has been delayed by only two weeks in releasing the report and putting it on the website because of staff shortages and chaos in the office.
In response to a question, he said that information regarding debt is being compiled from many government agencies and ministries and there is communication between the Central Bank, the Ministry of Finance and the Ministry of Economic Affairs in this regard and they are working together on it.
