$2.3 billion external public debt in FY2018-19 lowest in 3 years: govt

Published July 26, 2019
The Economic Affairs Division says the govt is expecting very strong inflows from its development partners this year. — AFP/File
The Economic Affairs Division says the govt is expecting very strong inflows from its development partners this year. — AFP/File

The Economic Affairs Division on Friday said that the net addition to the external public debt during FY2018-19 was only $2.29 billion which is the lowest in the last three years.

The division said in a press release, "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."

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

Know more: Pakistan to get $1.65bn net receipts out of $6bn IMF package

Showing a 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 $6.82bn, $4.77bn and $8.64bn respectively.

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

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.

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

Opinion

Editorial

Smog hazard
Updated 05 Nov, 2024

Smog hazard

The catastrophe unfolding in Lahore is a product of authorities’ repeated failure to recognise environmental impact of rapid urbanisation.
Monetary policy
05 Nov, 2024

Monetary policy

IN an aggressive move, the State Bank on Monday reduced its key policy rate by a hefty 250bps to 15pc. This is the...
Cultural power
05 Nov, 2024

Cultural power

AS vital modes of communication, art and culture have the power to overcome social and international barriers....
Disregarding CCI
Updated 04 Nov, 2024

Disregarding CCI

The failure to regularly convene CCI meetings means that the process of democratic decision-making is falling apart.
Defeating TB
04 Nov, 2024

Defeating TB

CONSIDERING the fact that Pakistan has the fifth highest burden of tuberculosis in the world as per the World Health...
Ceasefire charade
Updated 04 Nov, 2024

Ceasefire charade

The US talks of peace, while simultaneously arming and funding their Israeli allies, are doomed to fail, and are little more than a charade.