Pakistan’s total debt and liabilities have reached an alarming new peak, raising concerns about the country’s fiscal health. According to data released recently, the national debt has ballooned to nearly Rs.81 trillion (approximately $467 billion USD).
This staggering figure represents three-fourths of Pakistan’s entire economy and surpasses the limit set by the Fiscal Responsibility and Debt Limitation Act by roughly 15%.
Can Pakistan control its debt crisis?
The dramatic increase comes after a year of significant growth in debt. Over the past twelve months, the total debt and liabilities surged by Rs.8.4 trillion (approximately $48.5 billion USD). This equates to a 12% rise, with the debt accumulating at a daily rate of Rs31 billion (approximately $1.8 billion USD).
Breaking down the numbers further, the gross public debt managed by the Ministry of Finance stands at Rs.67.5 trillion (approximately $392 billion USD) as of March. This significant rise can be partly attributed to expansionary fiscal policies implemented in recent years.
Additionally, Public Sector Enterprises (PSEs) have contributed to the growing burden, with their debt climbing to Rs.3.8 trillion (approximately $22 billion USD) to cover their deficits.
Also read: “Pakistan Has The Potential To Surpass India In Revenue Collection”: Says PM Shehbaz Sharif
The skyrocketing debt has become a major concern for economists and financial experts. With such a large portion of national income dedicated to debt servicing, there are worries about reduced resources for crucial areas like healthcare, education, and infrastructure development.
The government is likely to face pressure to take steps towards curbing the debt and bringing it under control. This could involve implementing stricter fiscal measures, streamlining public spending, and exploring avenues for economic growth and revenue generation.
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