$2.45bn paid as external debt servicing

Published December 8, 2018
Government paid off $1.9bn as principal and $0.55bn as interest accrued on the total debt. — Feica
Government paid off $1.9bn as principal and $0.55bn as interest accrued on the total debt. — Feica

KARACHI: External debt servicing during the first quarter of current fiscal year reached $2.452 billion, accor­ding to data released by the State Bank of Pakistan (SBP).

The government paid off $1.9bn as principal and $0.55bn as interest accrued on the total debt. The government is in a tight spot as Pakistan’s debt servicing related requirements are estimated at $9.3bn in the ongoing fiscal year.

Minister for Finance Asad Umar has set a borrowing target of $12bn for the current fiscal year to meet the enlarged current account deficit. However, higher borrowing would simply lead to higher debt servicing costs which ate up $7.5bn of country’s foreign exchange rese­rves in the last fiscal year.

At this rate of $2.452bn a quarter, Pakistan’s debt servicing costs are likely to reach $9.8bn during the ongoing fiscal year.

In March this year, the International Monetary Fund (IMF) estimated Pakistan’s external debt servicing to reach over $19bn by 2023. Pakistan is currently negotiating a programme with the IMF to borrow funds but the talks went sour over the pace of reforms. The talks have been extended till January next year.

The PTI government has also sought help from Saudi Arabia, China and UAE — friendly nations — to arrange the required $12bn.

Published in Dawn, December 8th, 2018

Follow Dawn Business on Twitter, LinkedIn, Instagram and Facebook for insights on business, finance and tech from Pakistan and across the world.

Opinion

Editorial

Judiciary’s SOS
Updated 28 Mar, 2024

Judiciary’s SOS

The ball is now in CJP Isa’s court, and he will feel pressure to take action.
Data protection
28 Mar, 2024

Data protection

WHAT do we want? Data protection laws. When do we want them? Immediately. Without delay, if we are to prevent ...
Selling humans
28 Mar, 2024

Selling humans

HUMAN traders feed off economic distress; they peddle promises of a better life to the impoverished who, mired in...
New terror wave
Updated 27 Mar, 2024

New terror wave

The time has come for decisive government action against militancy.
Development costs
27 Mar, 2024

Development costs

A HEFTY escalation of 30pc in the cost of ongoing federal development schemes is one of the many decisions where the...
Aitchison controversy
Updated 27 Mar, 2024

Aitchison controversy

It is hoped that higher authorities realise that politics and nepotism have no place in schools.