Pakistan's financial woes intensifies, debt rises to Rs 149 trillion under Imran Khan govt

Pakistan's financial debt has reached a new high as the country’s total debt rose to Rs.149 trillion under Prime Minister Imran Khan’s Tehreek-e-Insaf's (PTI) three-year tenure. According to an annual report released by the State Bank of Pakistan, Pakistan's debt currently stands at 399 trillion. Earlier, Pakistan’s economy was reported to slump to a new low under the PTI rule as the country’s fiscal deficit stood at 7.1 per cent of GDP for 2020-21.

"The annual report released by State Bank of Pakistan shows government debts at 399 trillion and of this, debts rose by Rs 149 trillion during three years under PTI and this debt raised by the PTI government is equal to 80 per cent of debts raised by Pakistan Peoples Party (PPP) and Pakistan Muslim League-Nawaz (PML-N) during 10 years of their rule," local media reported on Wednesday.

Pakistan's debt rises

Pakistan is on the verge of a debt crisis as public debt also increased by over eight per cent in 11 months of the fiscal year ended in June. The rise in public debt came as a result of increased government borrowing to meet the spending requirements during the COVID-19 pandemic, The News International reported, citing the government data in the month of July. Earlier last week, the International Monetary Fund (IMF) handed a sum of USD 2.75 billion to Pakistan under a Special Drawing Rights (SDR) programme as it continues to fight against coronavirus.

According to ANI, financial analysts predict the budget deficit to be in the range of 7.0-7.5 per cent in the fiscal year 2022, as the government could cover the shortfall by cutting expenditures in both its current and developmental structure. However, the Pakistan outlet showed a positive outlook to the increased level of external inflows from multilateral and bilateral development partners and claimed in its official report that the same was indicative of their confidence in the development priorities policies of the PTI government.

Impact of COVID on Pak's economy

Pakistan’s economy has been struggling to stay afloat, and the COVID-19 pandemic has severely impacted the nation’s economy, virtually pushing it to the brink of bankruptcy, a report by Observer research Foundation revealed. “Pakistan’s economy does not have the capacity to absorb the massive disruption caused by the pandemic,” it informed, adding that the country was forced to seek an Extended Fund Facility (EFF) programme with the International Monetary Fund (IMF) due to its twin deficit problem. 

IMAGE: PTI