According to State Bank’s FY 15 report, Pakistan’s debt to GDP ratio was at 64.80%. Pakistan’s debt relative to the emerging markets is extremely unfavorable as it poses a huge risk of default. Pakistan has time and again succumbed to debt pressures and asked bailouts from International Monetary Fund (IMF) and other international agencies.
During one year (‘17) the External Debt has risen by 9 Billion Dollars. During the last four years of the incumbent government External Debt has risen by 22 Billion Dollars. As of June 30, 2013, Pakistan’s External Debt stood around 61 Billion Dollars.
Pakistan’s Total External Debt is expected to cross $100 Billion dollar mark by 2019-20. In addition to that, Pakistan’s cost of financing the debt and current account gap is projected to increase from $ 6.6 billion in 2015-16 to $13 billion by 2019-20. With no respite in coming years, the next five years are going to become extremely uneasy for Pakistan as Pakistan’s external debt and liabilities would equal to 387 percent of the Export Earnings within next three years.
Adding fuel to the fire, cost of debt financing is only going to go up from here as maturities for Euro/Sukuk bonds inch closer, the start of debt repayment of the Paris Club debt along with the repayment of IMF loan all converge in the next few years.
Government External Debt rises by 5.5 Billion Dollars per annum. Pakistan Domestic Debt since 2013 climbed by Rs. 5500 Billion.
Pakistan domestic debt reached to Rs. 15,300 billion by June 30, 2017. Domestic Debt level on June 30, 2013 was at Rs. 9800 Billion.