Over $25b foreign loans obtained, Senate told

By Ali Imran
ISLAMABAD: The Senate was informed on Friday that the country obtained US$25.59 billion worth of loans from global lending institutions during a period between July 2015 and July 2019. The Ministry of Finance informed the upper house of parliament that of the total public debt, 11.79 billion dollars were obtained from international financial institutions while 13.80 billion dollars from global commercial banks. It said the country’s net foreign reserves stand at over 18.8 billion dollars. Last year in July, the Economic Affairs Division in a statement had said the net addition to external public debt during fiscal year 2018-19 was only $2.29 billion, which is the lowest in the last three years. 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 net addition to the external public debt was only $2.29 billion which is the lowest of last three years,” reads the statement. It said that the net additions to the external public debt during the last three fiscal years i.e. FY 2015-16 to FY 2017-18 were $6.82 billion, $4.77 billion and $8.64 billion respectively. The Economic Affairs Division further said that the ADB and World Bank 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. Federal Minister for Economic Affairs Hammad Azhar said on Friday the government aims to bring fiscal deficit down to four per cent in the next one or two years. Speaking in the Senate during the question hour, he said the incumbent government’s fiscal deficit for the first quarter of current fiscal year remained well within the target. Hammad Azhar said the government took tough decisions to save the country from default. He added it paid off over 10 billion dollars of debt in its first year in power, which is the highest made by any government. He maintained foreign exchange reserves are also on an upward trajectory. The minister said revenue collection has also witnessed growth during the first half of current fiscal year and efforts are afoot to enhance non-tax revenue. He added the private sector will be provided with an enabling environment to create job opportunities for the youth. Hammad Azhar said the government intends to gradually reduce the debt-to- GDP ratio. For this purpose, it will enhance revenues and foreign exchange reserves besides cutting expenditures, he explained. He further said the commerce and finance ministries and the State Bank of Pakistan are in consultation to revive the sick industrial units. He pointed out that the flawed policies of previous governments adversely damaged these units.