Featured Pakistan’s debt, liabilities sour past the size of its economy

[Path-Finder]

Pakistan’s debt, liabilities sour past the size of its economy
SAMAA | Samaa Money - Posted: Aug 29, 2020 | Last Updated: 8 hours ago

Pakistan’s outstanding debt and liabilities reached Rs44.6 trillion as of June 30, 2020 going past the size of its economy, according to the statistics the State Bank of Pakistan published on Thursday.

The total debt and liabilities increased by more than a tenth in the latest fiscal year and now stand at 107% of its GDP, which stands at Rs41.7 trillion, according to the central bank’s data.
This is much higher than the 60% limit as described under Pakistan Fiscal Responsibility and Debt Limitation Act 2005 and it has been above this line since the time of PML-N government. In fiscal year 2018, the last year of the PML-N government, the total debt and liabilities were Rs29.8 trillion or 86.3% of the GDP, therefore, the present set-up has added another Rs14.8 trillion to the national debt since then.
This mountain of debt leaves Pakistan with no money to spend on its people. This is because more than 40% of its budget is spent on repaying the previous loan. Successive governments have failed to meet tax collection target, which results in lower revenue. On the other hand, they end up spending more than what’s allocated in the budget. Higher spending and lower revenue creates large budget deficit, which is then plugged through more borrowing and the cycle goes on.​

Pakistan's debt, liabilities sour past the size of its economy

The country now owes Rs44.6 tn

www.samaa.tv

 

[TNT]

This is very worrying. If the govt cannot do anything else then atleast create a national company to extract gold from balochistan along with other minerals. We know tax collection is impossible in this system where all the businessmen are part of assemblies and govts.

 

[Longhorn]

This is a trick the opposition are pulling.
They are quoting debt in rupee terms because it sounds worse because of the depreciation of the PKR. In dollar terms the loan burden hasn't changed quite as much.

 

[The Accountant]

This was much expected specially due to Corona and lock down where tax collection was extremely low and expenditure was very high.

With the current account deficit in control, economic recovery is expected to pick pace. We might see a reversing trend within 2 years time.

 

[Shahzaz ud din]

Pakistan’s debt, liabilities sour past the size of its economy
SAMAA | Samaa Money - Posted: Aug 29, 2020 | Last Updated: 8 hours ago

​

Pakistan’s outstanding debt and liabilities reached Rs44.6 trillion as of June 30, 2020 going past the size of its economy, according to the statistics the State Bank of Pakistan published on Thursday.

The total debt and liabilities increased by more than a tenth in the latest fiscal year and now stand at 107% of its GDP, which stands at Rs41.7 trillion, according to the central bank’s data.
This is much higher than the 60% limit as described under Pakistan Fiscal Responsibility and Debt Limitation Act 2005 and it has been above this line since the time of PML-N government. In fiscal year 2018, the last year of the PML-N government, the total debt and liabilities were Rs29.8 trillion or 86.3% of the GDP, therefore, the present set-up has added another Rs14.8 trillion to the national debt since then.
This mountain of debt leaves Pakistan with no money to spend on its people. This is because more than 40% of its budget is spent on repaying the previous loan. Successive governments have failed to meet tax collection target, which results in lower revenue. On the other hand, they end up spending more than what’s allocated in the budget. Higher spending and lower revenue creates large budget deficit, which is then plugged through more borrowing and the cycle goes on.

Pakistan's debt, liabilities sour past the size of its economy

The country now owes Rs44.6 tn

www.samaa.tv

As of March 2020, public debt of Pakistan is estimated to be about ₨42.8 trillion/US$256 billion which is 98.2 percent of gross domestic product (GDP) of Pakistan.About ₨18.17 trillion is owed by the government to domestic creditors, and about ₨13.78 trillion is owed by Public Sector Enterprises (PSEs).

As of March 2020, external Debt of Pakistan was around US$112 billion. Pakistan owes !!!
US$11.3 billion to Paris Club
US$27 billion to multilateral donors,
US$5.765 billion to International Monetary Fund
US$12 billion to international bonds such as Eurobond, and sukuk. About fifth of the external debt which is estimated around US$19 billion is owed to China due to China-Pakistan Economic Corridor.

 

[Shahzaz ud din]

External debt and liabilities surge
SBP reports addition of $17.6b in past two years to nearly $113b by end of June 2020


Shahbaz RanaAugust 27, 2020

ISLAMABAD:
Pakistan’s external debt and liabilities mushroomed to nearly $113 billion at the end of June this year, an addition of $17.6 billion or 18.5% in the past two years, reported the State Bank of Pakistan (SBP) on Wednesday.
The external debt and liabilities - $112.8 billion to be precise - has been booked by both public and private sectors. However, 87% of the external debt and liabilities is the direct and indirect responsibility of the federal government.
Pakistan’s total external debt and liabilities as of June 2020 stood at $112.8 billion, higher by $17.6 billion or 18.5% from the level recorded two years ago, according to the external debt bulletin the central bank released on Wednesday.
When the Pakistan Tehreek-e-Insaf (PTI) government came to power, the total external debt and liabilities amounted to $95.2 billion.
In June 2018, the exchange rate was also Rs121.54 to a dollar, which depreciated to Rs162.2, stated the central bank. Within two years, the rupee lost its value by 38.4% against the greenback.
The country’s external debt and liabilities surged to current levels despite payment of $24.5 billion by Pakistan in interest and principal loans over the past two years. The growing debt level suggests that Pakistan has slipped into the debt trap and it is now taking new loans to pay back the old ones.
The alarming figures indicate the government’s inability to ensure enough non-debt creating inflows to meet the external account requirements. Owing to huge domestic and foreign borrowing, debt servicing is the largest expense in the federal budget.
Pakistan’s exports remained in the range of $22 billion to $24 billion over the past many years, which forced every government to borrow from external sources to remain afloat.
The external public debt, which stood at $75.4 billion two years ago, has risen to nearly $88 billion, an increase of $12.5 billion or 16.5% within two years.
Out of the total external public debt, the government’s direct obligations are equal to $70.2 billion, which exclude government-guaranteed and public sector enterprises’ debt.

The debt obtained through commercial loans increased to $8 billion by June this year, which also impacted the government’s average time-to-maturity indicator due to the shortening of external debt maturity tenor.
The rise in external debt comes at a time when the official foreign currency reserves remain low and the government has to take expensive foreign loans to keep the reserves in double digits.
In June 2018, the SBP’s foreign exchange reserves stood at $9.8 billion, which by June this year increased to $12.5 billion, purely due to loans.
Overall, the PTI government added Rs11.35 trillion to the public debt during the first two years in power, which was more than the total debt the previous government had taken in its five-year term.
The total public debt as of June 30, 2020 increased to 87% of gross domestic product (GDP), up from 72.5% two years ago.
In terms of size of the economy, the external public debt and liabilities also increased from 33.4% to 45.5% of GDP within two years.
The IMF debt, which was $6 billion two years ago, increased to $7.7 billion by June this year, according to the SBP. There was an increase of $1.7 billion or 28% in the IMF debt.
Pakistan could not receive two loan tranches from the IMF, totalling $1 billion, after the programme derailed in February this year.
The external liabilities that amounted to $5.1 billion two years ago have also increased to $9.9 billion due to loans obtained from Saudi Arabia and the United Arab Emirates. The SBP’s liabilities were only $700 million two years ago that have now grown to $5.7 billion, according to the central bank’s figures.
The external debt of public sector enterprises that was $2.6 billion two years ago increased to $4.2 billion - a jump of 61% within two years.
The public external debt including PSEs liabilities was $78.2 billion in June 2018. It has increased to $93 billion by June this year -a surge of nearly 19%.
The private sector debt was $9.1 billion in June 2018 that jumped to $11 billion in two years.
The SBP data showed that in the last fiscal year 2019-20, the total external debt servicing stood $14.6 billion, including $3.2 billion cost of interest payments.
Published in The Express Tribune, August 27th, 2020.
Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.

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[Jackdaws]

Sad. Pandemic has pretty much squeezed liquidity out of global markets. All sectors will suffer as consumers won't spend much.

Anyways. I don't like to see common folk suffer anywhere. I hope things pick up.

 

[ziaulislam]

Pakistan’s debt, liabilities sour past the size of its economy
SAMAA | Samaa Money - Posted: Aug 29, 2020 | Last Updated: 8 hours ago

​

Pakistan’s outstanding debt and liabilities reached Rs44.6 trillion as of June 30, 2020 going past the size of its economy, according to the statistics the State Bank of Pakistan published on Thursday.

The total debt and liabilities increased by more than a tenth in the latest fiscal year and now stand at 107% of its GDP, which stands at Rs41.7 trillion, according to the central bank’s data.
This is much higher than the 60% limit as described under Pakistan Fiscal Responsibility and Debt Limitation Act 2005 and it has been above this line since the time of PML-N government. In fiscal year 2018, the last year of the PML-N government, the total debt and liabilities were Rs29.8 trillion or 86.3% of the GDP, therefore, the present set-up has added another Rs14.8 trillion to the national debt since then.
This mountain of debt leaves Pakistan with no money to spend on its people. This is because more than 40% of its budget is spent on repaying the previous loan. Successive governments have failed to meet tax collection target, which results in lower revenue. On the other hand, they end up spending more than what’s allocated in the budget. Higher spending and lower revenue creates large budget deficit, which is then plugged through more borrowing and the cycle goes on.

Pakistan's debt, liabilities sour past the size of its economy

The country now owes Rs44.6 tn

www.samaa.tv

Article has many factual errors..

 

[CrazyZ]

Article has many factual errors..

SBP figures include private sector liabilities.

Why would private sector debt a liability on the country?

Read up on the concerns of fractional reserve banking and the 2008 crisis in the USA.

 

[Protest_again]

SBP figures include private sector liabilities.


Read up on the concerns of fractional reserve banking and the 2008 crisis in the USA.

if you go by that measure, total debt of China is 330% of their GDP. And no, total debt listed for Pakistan doesn't include Private debt.

 

[CrazyZ]

Public Debt Sustainable, Capacity To Repay Remains Adequate, Says Finance Ministry

Mohammad Ali (@ChaudhryMAli88) 1 hour ago Sat 29th August 2020 | 11:53 PM


[IMG alt="Public debt sustainable, capacity to repay remains adequate, says Finance Ministry
"]https://photo-cdn.urdupoint.com/media/2020/08/_3/730x425/pic_1598727181.jpg[/IMG]
The Finance Ministry said here Saturday that the country's public debt was sustainable and its capacity to repay was also adequate

​

ISLAMABAD, (UrduPoint / Pakistan Point News - 29th Aug, 2020 ):The Finance Ministry said here Saturday that the country's public debt was sustainable and its capacity to repay was also adequate.
In a statement issued here, the ministry said that the government planed to run primary surplus, maintain low and stable inflation and promote measures that support higher long-term economic growth.
Quoting latest numbers of State Bank of Pakistan, the statement said that the total Public Debt-to-GDP ratio had increased from 86.1% in June 2019 to 87.2% in June 2020.
It is however important to note that this figure had actually gone down to around 84% in December 2019 which was on the back of strong growth in Federal Board of Revenue (FBR) taxes and strict control on current expenditure.
The prudent economic policies had resulted in posting of a Primary Surplus in February 2020 which was after a gap of many years, the statement said adding that however, the COVID-19 pandemic had adversely impacted the economy and slowed down the reforms program of the government. it added.
Pakistan's economy suffered from COVID-19 out break through various channels like reduction in revenue and increase in expenditures, declines in domestic & global demand, lower tourism and business travel, trade & production linkages and supply disruptions, etc.

Resultantly, the Debt-to-GDP ratio has increased due to the sharp decline in growth and the increase in the budget deficit primarily, due to COVID-19 related expenditures, during last four months of FY 20.
It is also pertinent to add that the according to the Global Economic Prospects report published by the World Bank Group in June 2020, Pakistan economy has shown greater resilience than its peer in South Asia.
"In view of the foregoing it is expected that the government will be able to bring back the Debt-to-GDP ratio on a clear downward path over the medium term through increase in revenues and fiscal discipline," it said.
The finance ministry reiterated the government plans to run primary surplus, maintain low and stable inflation and promote measures that support higher long-term economic growth.

Public Debt Sustainable, Capacity To Repay Remains Adequate, Says Finance Ministry - UrduPoint

The Finance Ministry said here Saturday that the countrys public debt was sustainable and its capacity to repay was also adequate

www.urdupoint.com

 

[Pandora]

if you go by that measure, total debt of China is 330% of their GDP. And no, total debt listed for Pakistan doesn't include Private debt.

External debt of Pakistan amounts to 93 billion rest is either domestic debt or debt by privately owned groups. It isnt very hard to look at sbp website for financial data and news articles in this thread also mention the same but you being a typical Indian got your head up your arse so no hope for you lot.

Debt to GDP ratio Pakistan: 87.2%
Pakistan Debt to GDP
Debt to GDP ratio India: 87.6%
India Debt to GDP
All financial dat of Pakistan is here on SBP website.
http://www.sbp.org.pk/ecodata/index2.asp
Hope this will put an End to your nonsense. Fix your own country first which itself on brink of bankruptcy rather than pointing finger at others.

 

[Protest_again]

External debt of Pakistan amounts to 93 billion rest is either domestic debt or debt by privately owned groups. It isnt very hard to look at sbp website for financial data and news articles in this thread also mention the same but you being a typical Indian got your head up your arse so no hope for you lot.

Debt to GDP ratio Pakistan: 87.2%
Pakistan Debt to GDP
Debt to GDP ratio India: 87.6%
India Debt to GDP
All financial dat of Pakistan is here on SBP website.
http://www.sbp.org.pk/ecodata/index2.asp
Hope this will put an End to your nonsense. Fix your own country first which itself on brink of bankruptcy rather than pointing finger at others.

External debt is $113 billion it says so in the article. External public debt is $93 billion that is sovereign liable debt. India's public external debt is only $103 billion out of its $543 billion external debt. Rest is all corporate debt for which govt is not liable. Do you see the difference? A government with less than $300 billion economy is more or less equally liable compared with a govt with a 3 trillion economy.

Infact India's external debt has come down from $558 to $543 billion last fiscal while Forex reserves went up by more than $100 billion to reach $538 billion during same time period. India doesn't issue commercial bonds like Pakistan.

India's debt to GDP ratio has increased gradually from Rs 58.8 lakh crore (67.4% of GDP) in FY12 to Rs 146.9 lakh crore (72.2% of GDP) in FY20. This is what is today.

Even then what is more important is debt serviceability. India doesn't spend more than 18% of budget on debt servicing where as Pakistan spends 45% of budget(inflated by the way). You run fiscal deficits to the tune of 7% of GDP even in normal times? How long can you survive with so much borrowing?

 

[Pandora]

External debt is $113 billion it says so in the article. External public debt is $93 billion that is sovereign liable debt. India's public external debt is only $103 billion out of its $543 billion external debt. Rest is all corporate debt for which govt is not liable. Do you see the difference? A government with less than $300 billion economy is more or less equally liable compared with a govt with a 3 trillion economy.

Infact India's external debt has come down from $558 to $543 billion last fiscal while Forex reserves went up by more than $100 billion to reach $538 billion during same time period. India doesn't issue commercial bonds like Pakistan.

India's debt to GDP ratio has increased gradually from Rs 58.8 lakh crore (67.4% of GDP) in FY12 to Rs 146.9 lakh crore (72.2% of GDP) in FY20. This is what is today.

Even then what is more important is debt serviceability. India doesn't spend more than 18% of budget on debt servicing where as Pakistan spends 45% of budget(inflated by the way). You run fiscal deficits to the tune of 7% of GDP even in normal times? How long can you survive with so much borrowing?

Listen doofus i quoted you official state bank of Pakistan if you dont want to do a bit of research dont quote me again.
India external debt is 563 billion dollars according to your own official website and this doesn't even account for current quarters data in which India took record debt bcz of corona pandemic.

 

[Protest_again]

Listen doofus i quoted you official state bank of Pakistan if you dont want to do a bit of research dont quote me again.
India external debt is 563 billion dollars according to your own official website and this doesn't even account for current quarters data in which India took record debt bcz of corona pandemic.

The Indian government does not issue sovereign bonds the way other governments do. Out of the total $101 billion of sovereign debt, $87 billion is accounted for by bilateral and multilateral credit, while IMF loans accounts for another $5.5 billion and trade credit for $7.2 billion. Since these are not in the form of market-listed sovereign bonds, market risk is really not applicable.

India's external debt $557 billion end june 2020. India doesn't take external debt to run their budget like Pakistan.

This is from the article quoting SBP

Pakistan’s external debt and liabilities mushroomed to nearly $113 billion at the end of June this year, an addition of $17.6 billion or 18.5% in the past two years, reported the State Bank of Pakistan (SBP) on Wednesday