In the latest press release, The Economic Affair Division shared the progress which stated that the net additions to the external public debt during the fiscal year 2018 – 2019 were only 2.29 billion USD. The figure marks the lowest rank within the period of three preceding fiscal years, which validates the government’s policy to smartly manage one of the major economic issues i.e. external debts and their financing.
The press release stated that, “The total external inflows during FY 2018-19 were 10.186 billion USD, including grants of 330 million USD, while external loans obtained by the government during the year were 9.85 billion USD with the government making payment of 8.94 billion USD on account of retirement of external debt and debt servicing.”
The division further authenticated the statement with factual comparisons, which undoubtedly shows a significant downward shift in the net additions to the debt. In the last three fiscal years, the additions were 6.82 billion USD, 4.77 billion USD and 8.64 billion USD. The division added that the funds from the Asian Development Bank (ADB) and World Bank (WB) were disbursed with delays due to the political transition occurred last year. Budgetary supports were also temporarily suspended due to unstable economic conditions.
The government aims to avoid the easy commercial financing options, as it comes with a relatively higher cost which makes it less affordable for Pakistan according to the given economic conditions. The division stated that long term concessional financing from multilateral and bilateral sources is more viable for the current economy and the government is drafting a strategy to proceed with this option. Commercial financing might be used as a back-up option to strengthen foreign exchange reserves and to maintain stability in the market. However, the option would be subject to the approval of the Federal Cabinet, on the basis of the comparative rates.
