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Large repayments, external debt rising in Pakistan
According to the SBP, the external debt has gone from $57.363 billion last year to $61.845 billion.
Despite large repayments the country’s foreign debt has been rising posing a serious threat in the wake of drying up of dollar inflows.
The State Bank on Saturday disclosed that the country paid $8.854 billion in debt servicing including $7.786 billion as principals and $1.068 billion as interest during 2011.
The external debt at the end of June 2010 was $57.363 billion which rose to $61.845 billion in June 2011 despite the fact that the government made a payment of $8.854 billion.
This trend continued during the first quarter of the current fiscal, but the debt remained intact despite higher repayments.
The government did not receive any loans from the IMF after the Fund has stopped releasing tranches on fiscal indiscipline. Pakistan signed standby loan agreement of $11.3 billion in 2008 but had received a total of about $8.9 billion.
The State Bank reported that during the first quarter (July-September) of 2011-12 the external debt servicing went further high.
During the quarter the country made a total repayment of $2.099 billion ($1.890 billion as principal and $209 million as interest) as debt servicing.
However, this large payment could hardly reduce the external debt burden by just $10 million to $61.835 billion from $61.845 billion at the end of June 2011.
Analysts say the large payments are generally met through borrowing from lending agencies but these lenders have stopped funding for Pakistan. The remittances have been helping the country to meet the trade deficit and last year the country succeeded to end up with current account surplus.
However, the first four months of this fiscal year witnessed a current account deficit of $1.555 billion giving an alarming message for the economic managers in the wake of falling foreign exchange reserves and beginning of repayment of IMF loans in next two months.
The repayment of IMF loan in the absence of further inflows could trigger panic-like situation particularly in the currency market.
The dollar appreciated by 3.5 per cent against the rupee in just one month amid worsening Pak-US relation.
Large repayments, external debt rising | Business | DAWN.COM
According to the SBP, the external debt has gone from $57.363 billion last year to $61.845 billion.
Despite large repayments the country’s foreign debt has been rising posing a serious threat in the wake of drying up of dollar inflows.
The State Bank on Saturday disclosed that the country paid $8.854 billion in debt servicing including $7.786 billion as principals and $1.068 billion as interest during 2011.
The external debt at the end of June 2010 was $57.363 billion which rose to $61.845 billion in June 2011 despite the fact that the government made a payment of $8.854 billion.
This trend continued during the first quarter of the current fiscal, but the debt remained intact despite higher repayments.
The government did not receive any loans from the IMF after the Fund has stopped releasing tranches on fiscal indiscipline. Pakistan signed standby loan agreement of $11.3 billion in 2008 but had received a total of about $8.9 billion.
The State Bank reported that during the first quarter (July-September) of 2011-12 the external debt servicing went further high.
During the quarter the country made a total repayment of $2.099 billion ($1.890 billion as principal and $209 million as interest) as debt servicing.
However, this large payment could hardly reduce the external debt burden by just $10 million to $61.835 billion from $61.845 billion at the end of June 2011.
Analysts say the large payments are generally met through borrowing from lending agencies but these lenders have stopped funding for Pakistan. The remittances have been helping the country to meet the trade deficit and last year the country succeeded to end up with current account surplus.
However, the first four months of this fiscal year witnessed a current account deficit of $1.555 billion giving an alarming message for the economic managers in the wake of falling foreign exchange reserves and beginning of repayment of IMF loans in next two months.
The repayment of IMF loan in the absence of further inflows could trigger panic-like situation particularly in the currency market.
The dollar appreciated by 3.5 per cent against the rupee in just one month amid worsening Pak-US relation.
Large repayments, external debt rising | Business | DAWN.COM
? Most of the articles you post are designed to create flame baits by endorsing tension for both sides (mainly India v Pak), is this your favourite past time on PDF? Here is my 2 cents in response to the topic. The GOP should stop being paranoid about her neighbours, and stop spending much of her GDP on defence. GOP should concentrate on public infrastructure, health, security and endorse FDI’s generate jobs and promote agriculture. You can start by removing the IRON GRIP the PA and ISI has on the constitution, and elect a government which is somehow free of corruption and put the public’s interests in mind, which at the current state looks next to impossible. Are we beating the donkey to death on this situation? I hope not. PS I almost forgot tell the Americans to get out and end the WOT if that was not repeated already.
