Pakistan listed in countries which are under enormous debt stress

LAHORE: Amid its mounting external debt, Pakistan is listed among the 15 countries globally which are under enormous debt stress, Business Recorder reported. Economic and financial analyst Ateeq ur Rahman said Pakistan needs to get rid of such circumstances as soon as possible.

Apart from the external debt, the government is facing soaring domestic borrowing costs due to ballooning high policy rates, which remain in the negative territory at 21 per cent, the report noted. The analyst feared that borrowing costs would rise even further.

He mentioned that Pakistan's external financing need for fiscal year 2024 is about US 40 billion dollars whereas Pakistan has external debt repayments amounting to USD 30 billion (including interest payments). Hence Pakistan's current account deficit is always dwindling, reported Business Recorder. Pakistan financing options beyond June 2023 are highly uncertain and hard, he said.

Pakistan can be placed amongst the 45 per cent of low-income countries at high risk of debt stress and a country facing borrowing at very high-interest rates, reported Business Recorder. He said, "This is a real crunch; it looks as if the country continues to brace financial shortages without any solutions. We need to cut down our expenses at all levels and practice simplicity at every nook and corner of our dealings."