FPCCI demands long-term economic strategy

The Federation of Pakistan Chambers of Commerce (FPCCI) has sought a longterm strategy to cope with the challenge of debt servicing amidst huge domestic and foreign loans, which have increased to Rs36.3 trillion or 87% of the gross domestic product (GDP).

FPCCI President Mian Anjum Nisar, in a written statement, opposed the excessive borrowing policy of previous governments, as the present government has also added Rs11.35 trillion in the total public debt during the first two years in power, which is more than the total debt amount the previous government has taken in its five-year term.

Citing figures, he observed that over 40% of the additional debt in the past two years was only because of debt servicing expenditures while about 30% due to rupee devaluation, which has depreciated almost 47% during this period.

Nisar flayed the economic managers for keeping the interest rate artificially high at 13.25% during this period, besides devaluing the rupee more than the requirements, contributing most to lift the public debt.

He said, “There was no rationalisation for making changes in the policy rate because it would further increase the debt servicing cost, as the policy rate had gone up by 600 basis points during this period.” FPCCI chief said Pakistan’s fiscal policy continued to focus primarily on macroeconomic stabilisation, in response to the financial crisis, instead of putting more emphasis on reforms to foster long-term growth through industrialisation by adopting advanced technology