Heavily in debt

[User]

Heavily in debt​

Dawn News Editorial
Updated 19 Dec 2020


PAKISTAN’S foreign debt and liabilities have been increasing rapidly over the last several years. The government is forced to borrow heavily from external sources — including multilateral and bilateral creditors, and commercial lenders — in order to meet its foreign debt repayment obligations, as well as to finance its budget, development and imports.

Its growing need for dollars has compelled the country to periodically knock at the doors of the IMF over the last three decades, at the cost of economic growth, to avert potential defaults on foreign repayment obligations and shore up forex reserves. With cheaper and softer bilateral and multilateral flows becoming scarce, the government’s reliance on expensive foreign commercial debt is rising. In November alone, it was forced to borrow $1.1bn from commercial lenders, pushing up the total debt flows in the first five months of the present financial year to $4.5bn. According to the economic affairs ministry, the new debt inflows so far constitute 37pc of the annual budget estimates of foreign borrowings of $12.4bn for the entire fiscal.

There are multiple reasons why Pakistan has turned into a heavily indebted nation. The exponential growth in foreign debt levels underscores that the country has been unable to attract adequate non-debt-creating, long-term inflows like FDI or increase its exports, which remain stuck at $23bn-$24bn a year, to meet its external account requirements. The extremely low level of formal domestic savings as reflected by banking deposits means that the government would have to depend on foreign savings to finance its budgetary operations as well as for balance-of-payments support. For example, almost 87pc, or $3.9bn, of the total loans taken in the last five months were meant for balance-of-payments or budgetary support. Similarly, the failure to reform the tax system and increase revenue collection is a major factor behind heavy domestic and foreign borrowings by the government.

The fact that Pakistan’s external debt continues to accumulate and it has to borrow more dollars to repay its old loans suggests that the country has actually been caught in a debt trap. Since July 1, 2018, the government has accumulated $23.6bn in foreign debt. The external debt rose by $10.7bn in the last financial year and $8.4bn in 2018-19 with debt servicing becoming the largest budget expense.

According to official data, the government paid back $2.45bn in the first four months of the current fiscal against repayment estimates of $10.4bn for the entire year — this, in spite of debt payment relief allowed by bilateral lenders to countries like Pakistan in view of Covid-19. That shows the government will continue to borrow more money to repay its old loans while accumulating more debt. This is not sustainable for any economy, least of all a fragile one. The government should put its house in order to attract FDI, boost exports, increase tax revenues and incentivise domestic savings to get out of this trap.

 

[Mohsin A]

Of course, PTI fanatics and Imran Khan's boot lickers will conveniently avoid this thread.

Speaking of critical thought, if you attempt to apply it to this topic then you'd find that the cause of this debt problem was largely due to the fact that the previous dungar leaderships were busy lining their own pockets with multiple billion $$$ and rampant corruption.
Now when you inherit the leadership of a state which is financially on it's knees, how do you expect we pay back our loans? A sensible & logical answer will suffice.

 

[CriticalThought]

Speaking of critical thought, if you attempt to apply it to this topic then you'd find that the cause of this debt problem was largely due to the fact that the previous dungar leaderships were busy lining their own pockets with multiple billion $$$ and rampant corruption.
Now when you inherit the leadership of a state which is financially on it's knees, how to do expect we pay back our loans? A sensible & logical answer will suffice.

I am calling out the self-gloating advertisement of financial success that shows growing state bank reserves based off increased debt and increased exports in a contracting world economy:

The remarkable recovery!

When I hear our media pundits discuss the state of Pakistan’s economy, I am stunned by their ignorance. During the past two years, Pakistan has made a remarkable recovery, but most people seem oblivious of this fact. It’s a simple and shocking story, based purely on numbers and maybe it remains...

defence.pk

These hypocrites want to have their cake and eat it too. Please adopt one single position: either we are in dire straits, or we are doing great.

 

[CIA Mole]

People need to get off their asses and do work.
Get together and build roads and housing and anything they can even if slavery and minimal pay.

Production is the economy.

 

[Bilal.]

I am calling out the self-gloating advertisement of financial success that shows growing state bank reserves based off increased debt and increased exports in a contracting world economy:

The remarkable recovery!

When I hear our media pundits discuss the state of Pakistan’s economy, I am stunned by their ignorance. During the past two years, Pakistan has made a remarkable recovery, but most people seem oblivious of this fact. It’s a simple and shocking story, based purely on numbers and maybe it remains...

defence.pk

These hypocrites want to have their cake and eat it too. Please adopt one single position: either we are in dire straits, or we are doing great.

There are two measures of external payment balance:

- Current account
- Financial account

Current account which was in deficit of almost $20 billion 2 years ago, has been in surplus for the first 4 months of this financial year. This indeed is a big achievement and means we don’t need to borrow to finance our imports anymore.

Financial account balance which includes debt repayments still is in negative due to the burden of past borrowings.

If we keep increasing our exports and keep a current account surplus then financial account pressure will also come down with time.

Also if you read the article, it mentions that we are at 37% of the planned total borrowing in 5 months (about 42% of the fiscal years time), so we are on track of borrowing within the planned amount or less if the current account situation stays positive.

 

[hussain0216]

Of course, PTI fanatics and Imran Khan's boot lickers will conveniently avoid this thread.

What the hell do you think they were going to do in 2 years you Muppet??????

It's crazy that you think PTI has some fairy wand that can suddenly fix decades of uselessness and expand our industrial base, establish more industrial parks, overhaul education and expand our exports

This article is the REASON why we need to try to support IK not because the guy is a genius but simply because the old scum DID NOTHING

The Sharif's , Bhuttos, these are village type politicians, all they know what to do is scream and shout, feel biryani to their supporter's then go rich by raping the country


They have left us in this situation

if you want to explain to me how PTI would in your mind supposed to fix all this in 2 years then we can talk

Otherwise help in getting rid of PPP and pmln forever and get moving fixing the situation so in 3 to 5 years time we can see some results

 

[Norwegian]

Of course, PTI fanatics and Imran Khan's boot lickers will conveniently avoid this thread.

Too much Khota Biryani consumption?

PAKISTAN’S foreign debt and liabilities have been increasing rapidly over the last several years

I am calling out the self-gloating advertisement of financial success that shows growing state bank reserves based off increased debt and increased exports in a contracting world economy

Pakistani economy has stabilized unlike that what was going in your favorite PMLN govt

These hypocrites want to have their cake and eat it too. Please adopt one single position: either we are in dire straits, or we are doing great.

We are doing much better now. This is what was going on in your favorite PMLN govt

Otherwise help in getting rid of PPP and pmln forever and get moving fixing the situation so in 3 to 5 years time we can see some results

Getting rid of PPP and PMLN mafia? Lol he is part of them

 

[hussain0216]

Getting rid of PPP and PMLN mafia? Lol he is part of them

I am assuming that EITHER

These people or their families are connected to these parties i.e they have family members who are councillors, or party members etc

Or

They haven't mentally evolved from dynastic politics where the great leader is some sort of prophet that must always be obeyed

Otherwise it makes no sense how educated people can still want Sharif's or Bhuttos in power


I have said this repeatedly now
Imran Khan isn't perfect, PTI isn't perfect, far from it

I give no eternal support to IK, but I support a sincere attempt to transform Pakistani society and economy a task that any intelligent person will know will take many years

In democracy you give a politician a chance to lead and transform your country for the better, if they fail then they are DISCARDED

Pakistani people simply don't understand this concept and want the same faces for decades on end

 

[Norwegian]

Pakistani people simply don't understand this concept and want the same faces for decades on end

They are slaves to these discarded politicians.

 

[masterchief_mirza]

Sharif's , Bhuttos, these are village type politicians, all they know what to do is scream and shout, feel biryani to their supporter's then go rich by raping the country

Excellent post. Repeating the key point.

 

[PAKISTANFOREVER]

Heavily in debt​

Dawn News Editorial
Updated 19 Dec 2020


PAKISTAN’S foreign debt and liabilities have been increasing rapidly over the last several years. The government is forced to borrow heavily from external sources — including multilateral and bilateral creditors, and commercial lenders — in order to meet its foreign debt repayment obligations, as well as to finance its budget, development and imports.

Its growing need for dollars has compelled the country to periodically knock at the doors of the IMF over the last three decades, at the cost of economic growth, to avert potential defaults on foreign repayment obligations and shore up forex reserves. With cheaper and softer bilateral and multilateral flows becoming scarce, the government’s reliance on expensive foreign commercial debt is rising. In November alone, it was forced to borrow $1.1bn from commercial lenders, pushing up the total debt flows in the first five months of the present financial year to $4.5bn. According to the economic affairs ministry, the new debt inflows so far constitute 37pc of the annual budget estimates of foreign borrowings of $12.4bn for the entire fiscal.

There are multiple reasons why Pakistan has turned into a heavily indebted nation. The exponential growth in foreign debt levels underscores that the country has been unable to attract adequate non-debt-creating, long-term inflows like FDI or increase its exports, which remain stuck at $23bn-$24bn a year, to meet its external account requirements. The extremely low level of formal domestic savings as reflected by banking deposits means that the government would have to depend on foreign savings to finance its budgetary operations as well as for balance-of-payments support. For example, almost 87pc, or $3.9bn, of the total loans taken in the last five months were meant for balance-of-payments or budgetary support. Similarly, the failure to reform the tax system and increase revenue collection is a major factor behind heavy domestic and foreign borrowings by the government.

The fact that Pakistan’s external debt continues to accumulate and it has to borrow more dollars to repay its old loans suggests that the country has actually been caught in a debt trap. Since July 1, 2018, the government has accumulated $23.6bn in foreign debt. The external debt rose by $10.7bn in the last financial year and $8.4bn in 2018-19 with debt servicing becoming the largest budget expense.

According to official data, the government paid back $2.45bn in the first four months of the current fiscal against repayment estimates of $10.4bn for the entire year — this, in spite of debt payment relief allowed by bilateral lenders to countries like Pakistan in view of Covid-19. That shows the government will continue to borrow more money to repay its old loans while accumulating more debt. This is not sustainable for any economy, least of all a fragile one. The government should put its house in order to attract FDI, boost exports, increase tax revenues and incentivise domestic savings to get out of this trap.

Isn't this article from the dawn newspaper. The same dawn newspaper that is anti-Pakistani and pro-indian?............

 

[Mugen]

Isn't this article from the dawn newspaper. The same dawn newspaper that is anti-Pakistani and pro-indian?............

PDM supporter are pro Indian and anti Pakistani, they support their corrupt "leaders" over Pakistan, it makes my blood boil.

 

[PAKISTANFOREVER]

PDM supporter are pro Indian and anti Pakistani, they support their corrupt "leaders" over Pakistan, it makes my blood boil.

That has been known for at least 30 years. What scares me the most and makes my blood boil are the low IQ retards who support them and vote them in to power. If this doesn't change soon, Pakistan will become the most poorest nation on earth making Afghanistan and Somalia look like Dubai or Germany.

 

[CriticalThought]

Too much Khota Biryani consumption?


View attachment 697838

Pakistani economy has stabilized unlike that what was going in your favorite PMLN govt View attachment 697839View attachment 697840

We are doing much better now. This is what was going on in your favorite PMLN govt
View attachment 697841View attachment 697842View attachment 697843View attachment 697844View attachment 697845

Getting rid of PPP and PMLN mafia? Lol he is part of them

You aren't going to get one past me. For the general readers, here is the break down of the manipulation of Nawaz vs manipulation of Imran.

Nawaz through Ishaq Dar kept the dollar rate down through two means: extensive borrowing on the one hand, and at the same time controlling the demand for dollars in the local economy. If you went to money changers in that time, I am hypothesizing (I wasn't in the country myself) you would have a hard time converting rupee to dollar. Furthermore, he demolished economic activity, e.g., manufacturing. In order to manufacture something, you need machinery and raw materials from outside for which you need dollars. Nawaz government tuned this need of dollar for manufacturing into a need for dollars to import consumer goods. By this means he kept the state bank reserves in check, and an artificially low debt amount in rupee, while destroying the current account deficit.

Imran Khan is increasing State Bank reserves through massive debt. The contribution of increased exports is miniscule as compared to the debt he is taking on. This allows him to show a mirage to the country and promise a bright future. This man is lying because exports will only increase if the level of education and human development increases. This requires giving attention to education from the primary school onwards. But this traitor is creating Sufi universities to keep the public ignorant. And the fact is, that he is himself ignorant. He is running Punjab on the advice of a pir who told him to appoint Buzdar. He is running the country based on WhatsApp message from his foreign masters. He is a puppet who is showing you a false dream just like Nawaz and Zardari before him showed the country a false dream. I wish my fellow Pakistanis will wake up and realize the truth.

There are two measures of external payment balance:

- Current account
- Financial account

Current account which was in deficit of almost $20 billion 2 years ago, has been in surplus for the first 4 months of this financial year. This indeed is a big achievement and means we don’t need to borrow to finance our imports anymore.

Financial account balance which includes debt repayments still is in negative due to the burden of past borrowings.

If we keep increasing our exports and keep a current account surplus then financial account pressure will also come down with time.

Also if you read the article, it mentions that we are at 37% of the planned total borrowing in 5 months (about 42% of the fiscal years time), so we are on track of borrowing within the planned amount or less if the current account situation stays positive.

Your 'big achievement' of lowering current account deficit has been achieved by reducing imports. You don't have any meaningful exports to brag about - yet. And I keep repeating the question raised by Dr. Shahid Masood - who is importing these increasing exports in a contracting world economy?

I am assuming that EITHER

These people or their families are connected to these parties i.e they have family members who are councillors, or party members etc

Or

They haven't mentally evolved from dynastic politics where the great leader is some sort of prophet that must always be obeyed

Otherwise it makes no sense how educated people can still want Sharif's or Bhuttos in power


I have said this repeatedly now
Imran Khan isn't perfect, PTI isn't perfect, far from it

I give no eternal support to IK, but I support a sincere attempt to transform Pakistani society and economy a task that any intelligent person will know will take many years

In democracy you give a politician a chance to lead and transform your country for the better, if they fail then they are DISCARDED

Pakistani people simply don't understand this concept and want the same faces for decades on end

You have been raised to be intellectually blind, and it is showing. See my post above to understand what Imran Khan is doing.

 

[AZ1]

You aren't going to get one past me. For the general readers, here is the break down of the manipulation of Nawaz vs manipulation of Imran.

Nawaz through Ishaq Dar kept the dollar rate down through two means: extensive borrowing on the one hand, and at the same time controlling the demand for dollars in the local economy. If you went to money changers in that time, I am hypothesizing (I wasn't in the country myself) you would have a hard time converting rupee to dollar. Furthermore, he demolished economic activity, e.g., manufacturing. In order to manufacture something, you need machinery and raw materials from outside for which you need dollars. Nawaz government tuned this need of dollar for manufacturing into a need for dollars to import consumer goods. By this means he kept the state bank reserves in check, and an artificially low debt amount in rupee, while destroying the current account deficit.

Imran Khan is increasing State Bank reserves through massive debt. The contribution of increased exports is miniscule as compared to the debt he is taking on. This allows him to show a mirage to the country and promise a bright future. This man is lying because exports will only increase if the level of education and human development increases. This requires giving attention to education from the primary school onwards. But this traitor is creating Sufi universities to keep the public ignorant. And the fact is, that he is himself ignorant. He is running Punjab on the advice of a pir who told him to appoint Buzdar. He is running the country based on WhatsApp message from his foreign masters. He is a puppet who is showing you a false dream just like Nawaz and Zardari before him showed the country a false dream. I wish my fellow Pakistanis will wake up and realize the truth.


Your 'big achievement' of lowering current account deficit has been achieved by reducing imports. You don't have any meaningful exports to brag about - yet. And I keep repeating the question raised by Dr. Shahid Masood - who is importing these increasing exports in a contracting world economy?

Either ur age is below 18 or above 65.