ISLAMABAD (Ahmed Mughal):- The Prime Minister Imran Khan’s led PTI Govt has finalized the strategy to borrow $19.4 billion external loan from external resources to bridge current account deficit during current fiscal year.
According to the estimates of foreign ministry, PM Imran led PTI Govt has estimated to borrow $19.4 billion external loan during fiscal year to bridge current account deficit.
Govt will use this amount to repay foreign loans and other officials obligations.
Pakistan’s Govt has set target to curtail the current account deficit to $6.7 billion (2.6 percentage of GDP).The Govt has closed the current account deficit during the last fiscal year with $13.1 billion (4.6 percentage of GDP).
The economic team of the country believes it will curtail its imports to $51.725 billion from $54 billion. It also expected to get $26.834 billion from exports and $22 billion from workers remittances during the period. Remaining amount will be bridge from loans.
According to the plan, the Finance Ministry has estimated that the country will get $3.005 billion from external resources. It has project to obtain $16.4 billion from multilateral and bilateral disbursements. The Govt has also expected to get one billion dollar from euro bonds.
The Finance Ministry is doing home work to devise a strategy to launch the euro bond up to Dec 2019.
The Govt is also hopeful to get $2 billion from commercial loan during the current fiscal year. The external debt will be swelled by $8.37 billion to $112.538 billion by end of CFY, official data shows.
The Govt is expecting to get the amount after IMF program signed in last month to deal current account accounts.
Advisor to PM on Finance, Dr Hafeez Sheikh believes the country will get 7/8 billion dollar from international organization.
According to the Fiscal Responsibility and Debt Limitation Act, 2005 , The Govt has to keep the debt below from 60 percent of total GDP.
but contrary to the act, the total debt and liabilities has been reached to Rs 30.5 trillion ($215 billion). Now the loan has been reached to 79.1 percent to GDP which is violation of the law.
The external debt of the country has been reached $104 billion in June 2019. It will further grow to $112 billion in June 2020. The Govt has to pay Rs 2978 billion, equal of 54 percent of FBR expect collection, for debt servicing from national exchequer.
Due to heavy borrowing, a common man who is earning average 2/3 dollar per day for feeding least quality food is facing high inflation. The inflation has grew in July 2019 by 10.3 percent, the Pakistan Bureau of Statistics reported.
Heavy borrowing has many reasons including low income and high govt expenditure, economic experts say.
The national exchequer has to pay Rs.3,254 billion to bridge budget deficit during the current fiscal year.
Now every Pakistani citizen is debtor of Rs 145 thousand which is equal of 10 month average wage in the country.