SoDATA (South Data) — Pakistan’s gross public debt and liabilities have risen to US$210.7 billion (PKR 33.712 trillion) “due to poor performance of the FBR and adverse implications of the Covid-19” pandemic, The Express Tribune reports.
The country’s GDP stands at PKR 43,585 billion at current market price (US$272.41 billion).
The World Bank this week asked Pakistan to upscale its existing Debt Office — from “coordination” to “Debt Management”. It’s a first drastic change since 2005, envisaging a shift in debt management from government to institutions.
Some experts welcomed the idea as the shift they say will add responsibility, authority and accountability (RAA) to the country’s Debt Office seamlessly and on continuity basis, regardless of which political government was in power.
A huge portion of the country’s federal net revenue over the years has been going toward paying debt markup. Not much has changed despite a-dollar-saved-a-dollar-earned austerity mantra — for lack of incremental revenues or additional revenues generation.
The existing Debt Office over the years was largely restricted to only coordination and advising the government. That may change, “meaning, in terms of debt and liabilities, the buck theoretically would stop at the Debt Office if it is allowed to operate unhindered”, said one professional.
Head of Islamabad Policy Research Institute (IPRI) Hasham bin Siddiq says the incumbent government overplayed its hand with dealing the already slowing economy. “The current economic team has successfully stifled the economy”, says Mr. Siddiq.
Relying on hot foreign money inflows was a risky strategy that eventually backfired, the Express Tribune reported.
Hot money is the flow of funds from one country to another in order to earn a short-term profit on interest rate differences and/or anticipated exchange rate shifts.
Some independent professionals say PM Khan’s team economic team ought to show some tangible results on the reeling economy, pandemic notwithstanding.
Last week, an Islamabad-based think tank expert proposed ‘Crisis Governance’ as a way forward in order to manage the pandemic and its anticipated impact on the economy.
Pakistan on Wednesday received $1.4 billion emergency loan from the IMF , as the country’s additional financing requirement has reportedly created a $2-billion financing gap in the fourth quarter of current fiscal year ending June 2020.
PM Khan thanked President Trump in a phone call on Wednesday for his support to Pakistan at the IMF and other forums, saying the funds will enable the country to have fiscal space to deal with the pandemic.
Trump “assured PM Khan of the United States’ economic help to Pakistan”.
US$1 = PKR 160
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