Pakistan heading towards severe debt trap: PEWJuly 22, 2014
ISLAMABAD: The Pakistan Economy Watch (PEW) on Wednesday said country would need 10.8 billion dollar to repay foreign debt in the ongoing fiscal. Policymakers are pinning hopes on foreign direct investment of privatization to repay loans as it can only spare 6.5 billion dollars to discharge international obligations, said Dr Murtaza Mughal, President PEW.
It appears that government will have to borrow more from international lenders to repay loans. He said that the government had also borrowed three trillion rupees from domestic sources during the last fiscal year pushing up debt from Rs 14 trillion to Rs 17 trillion.
The incumbent government whose top officials frequently criticized former government for reckless borrowing has been obtaining 300 percent more funds from local lenders than what the PPP-led government used to borrow from domestic sources, he noted.
Dr Murtaza Mughal said that government income was Rs 275 billion less than the projected figures while its expenditure exceeded by Rs 112 billion during the same period which is contrary to the pre-poll promises of PML-N.
The government has failed to introduce policies which can boost reserves without loans, bar flight of capital, broaden tax net or lure investors, he said. “Government should stop blaming former rulers for poor economic performance and take positive steps to boost economy. The situation will only improve if growth is accelerated, elite class people are taxed, agriculture is promoted and princely living is abandoned,” Dr Mughal concluded.