ICCI for Debt Reduction Strategy to cope with rising public debt

Islamabad: The local business community has shown great concerns over country’s sliding into a serious debt trap as Pakistan’s total public debt has risen to Rs.14.3 trillion sending the economy into a precarious situation.

Speaking at a meeting at Islamabad Chamber of Commerce & Industry, they said the rise in public debt would badly affect the micro and macroeconomic policies of the country and government should take urgent measures to prevent the country from falling into an unmanageable debt trap.

Chairing the meeting, Zafar Bakhtawari, President, Islamabad Chamber of Commerce & Industry observed that the mounting debt burden on country constitutes a serious threat to economic prosperity as it causes a negative impact on expansion of business activities, economic growth and job creation.

He said the rupee has already fallen to its historical low against dollar and any rise in debt would put more pressure on the exchange rate causing further depreciation of rupee and increase in inflation. He said it would also discourage both foreign and domestic investment and called upon the government to immediately make an effective debt reduction strategy to save the country from serious economic vulnerabilities.

Businessmen regretted that the successive governments failed to take effective measures to reduce the debt burden and the result is that we now have to borrow more to meet previous debt obligations.

They urged the government to bring stability in exchange rate, which is vital for reducing debt burden.

ICCI President said tapping country’s own resources, adopting an export-led growth strategy, broadening tax base by bringing all sectors of economy including agriculture into tax net, curtailing non-development public expenditure and increasing saving & investment in the country are the way forward to reduce debt burden and take the country out of debt trap.