Pak says its $2.3bn external public debt lowest in 3 years

Islamabad, July 27 (IANS) The Pakistan government's Economic Affairs Division said that the net addition to the external public debt during FY 2018-19 was only $2.29 billion, which is the lowest in the last three years, reported Daily Times.

"The total external inflows during FY 2018-19 were $10.186 billion, including grants of $330 million, while external loans obtained by the government during the year were $9.85 billion, with the government making payment of $8.94 billion on account of retirement of external debt and debt servicing," the Division said in a press release.

So, the net addition to the external public debt clocked in at $2.29 billion, it added.

According to the report, showing the comparison, the Economic Affairs Division further said that net additions to the external public debt during the last three fiscal years [FY 2015-16 to FY 2017-18] were $6.82 billion, $4.77 billion and $8.64 billion, respectively.

It added that the Asian Development Bank (ADB) and the World Bank (WB) disbursed $541.17 million and $652.75 million, respectively during FY 2018-19 as compared to $945.69 million and $817.54 million during FY 2017-18.

"A slowdown in disbursement from development partners during the outgoing fiscal year was mainly due to a period of political transition in the country," the press release said, adding that during the interim government, there was a complete ban by the Election Commission of Pakistan on new development projects and relevant competent forums [ECNEC and CDWP] were not in place for quite some time.

"After the formation of the elected government, provincial government's annual development plans were approved at a very delayed stage. Consequently, approval of new lending operations and project-related disbursement were slow during the initial months and started to pick-up during the second half of the year."

The division highlighted that budgetary support was also not available due to the weak macroeconomic position inherited by the incumbent government.

"With the restoration of confidence of international financial institutions and good prospects of budgetary support, the government is expecting very strong inflows from its development partners this year," it added.

According to the statement, the government resorted to commercial borrowing only as a contingency measure to strengthen foreign exchange reserves and to maintain stability in the market, the Daily Times reported said.