Categories: Economy

Pakistan’s financial woes rise as it sinks deeper into debt

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Pakistan’s Prime Minister Imran Khan ‘s economic challenges could increase with the shortened public debt maturity profile in the last fiscal year. This is a result of a higher degree of reliance on short-term loans, “exposing the government to refinancing risks in the middle of possibility of further increase in interest rates due to soaring inflation,” <a href="https://tribune.com.pk/story/2322914/pakistans-debt-maturity-profile-shortens">the Express Tribune</a> said.</p>
<p>
It added that the debt maturity has shortened at a time when the central bank has increased the interest rates while also signalling to further increase it in the coming months. “The government may have to replace relatively cheaper loans with expensive ones besides remaining vulnerable to the exploitation by the creditors,” the news organisation pointed out.</p>
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<strong>Also read: <a href="https://www.indianarrative.com/economy-news/contrary-to-reports-pakistan-afghanistan-trade-has-weakened-since-the-taliban-took-charge-119292.html">Contrary to reports, Pakistan-Afghanistan trade has weakened since the Taliban took charge</a></strong></p>
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The State Bank of Pakistan (SBP) data showed that the public debt increased to Rs 39.9 trillion by June this year, which is an addition of Rs 14.9 trillion in just three years.</p>
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The Pakistan Tehreek-e-Insaf (PTI) government has added on an average Rs 13.6 billion a day to the public debt, “which was more than double the daily average addition of Rs5.8 billion by the PML-N government, the Express Tribune said.</p>
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According to data, disbursements by the multilateral agencies have declined from $8.3 billion a year earlier to $4.8 billion in the last fiscal year. “This was replaced by short-term riskier debt,” the report said.</p>
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Meanwhile, Pakistan, with an increased debt-levels, is eyeing another $1 billion loan from the International Monetary Fund (IMF). Negotiations for the deal have started.  </p>

IN Bureau

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