Pakistan from the point of view of external debt is in real difficult situation as it is one out of 15 countries of the world in enormous debt stress, this is in real time exhausting position. We have to get rid of such circumstances, as soon as possible said ateeq ur rahman (economic & financial analyst).
It is not only the external debt but also the government is faced with soaring domestic borrowing cost due to ballooning high policy rate , which remains in the negative territory at 21% . We fear that borrowing cost would rise even further.
He added that the Pakistan External Financing need for fiscal year 2024 is around $40 billion whereas Pakistan has external debt repayments amounting to $30 billion (including interest payments). Hence Pakistan’s, Current Account Deficit is always dwindling. Further the refund of Domestic Debt is in trillions of rupees which has been borrowed of crowding out private sector credit. It appears that Pakistan financing options beyond June 2023 are highly uncertain and hard.
Pakistan can be placed amongst the 45% of low income countries at high risk of debt stress and a country facing borrowing at very high interest rates.
This is a real crunch, it looks as if country continues to brace financial shortages without any solutions. We need to cut down our expenses at all levels and practice simplicity at every nook and corner of our dealings. This may be a most frequently answered question to the most difficult inquiry of “Debt Stress” said ateeq.
