IMF paints a bleak and frightening picture of Pak economy; country’s economic managers fail to initiate apt, timely fiscal reforms; historically Pakistan has been borrowing with pride, pleasure; in June 2015, every Pakistani owed about Rs101,338
Now that the International Monetary Fund (IMF) has estimated that Pakistan’s external debt obligations would surge to $70.2 billion by end of the current fiscal, up from the $66.457 billion mark in September 2015, alarm bells might certainly have started ringing for the country’s candid economic wizards to respond to the situation. The IMF has also predicted that Pakistan’s debt-to-GDP ratio is all set to touch the 65 percent mark within the next few months.
Interestingly, not very long ago, some key functionaries of the incumbent PML-N government had claimed that the country’s debt-to-GDP ratio had dropped to 59.1 percent in October 2015 from a high of 64 percent in 2013.
On the contrary, the IMF estimates, calculations and projections are painting a very different picture altogether.
The picture is both bleak and frightening.
Pakistan may still not be the most indebted of countries, but its poor debt-to-GDP ratio bears ample testimony to the fact that country’s economic managers, serving successive regimes, have not succeeded in initiating appropriate, comprehensive and timely fiscal/monetary reforms that were otherwise required to raise revenues, restructure the loss-making Public Sector Enterprises and contain the non-targeted subsidies dished out to the energy sector.
Plunged into a vicious debt trap, Pakistan has historically borrowed loans with a lot of “pride and pleasure,” primarily to repay its outstanding debts.