PTI pays off $7.52b debt in 10 months of FY21: Ayub

Economic affairs minister says indicators point towards improvement in economy despite Covid outbreak

ISLAMABAD:

The ruling Pakistan Tehreek-e-Insaf (PTI) has paid off an amount of $7.52 billion including $6.31 billion as principal and $1.21 billion as interest payments during the first 10 months of the current fiscal years, showing remarkable performance despite the economic slowdown caused by the Covid-19 pandemic, Minister for Economic Affairs Omar Ayub Khan said in a statement issued on Thursday.

When the PTI government came to power, he said, Pakistan was facing daunting challenges such as high current account deficit which was brought down drastically due to the incumbent government's sound fiscal policies.

“Now, indicators point towards improvement in the national economy despite the outbreak of the coronavirus pandemic in the country,” he said.

The minister said all high-frequency data showed improvement in the economy and the Gross Domestic Product (GDP) growth rate was estimated at 3.94% as a result of successful policy interventions.

This economic performance, he said, was remarkable amid the pandemic and being appreciated by the international development community.

Ayub said the ruling PTI inherited an elevated level of debt servicing of around $10 billion per year mainly caused by the enhanced external borrowing ($49.76 billion), especially short-term and expensive commercial loans ($17 billion) by the PML-N government.

During the current fiscal year, the government has to repay about $10.36 billion on account of external loans including principal and interest payments while expected inflows are estimated at $14.37 billion.

“During the first 10-months of FY2020-21, the government has repaid an amount of $7.52 billion including $6.31 billion as principal and $1.21 billion as interest payments.”
In order to discharge its various obligations, he said, the government borrowed $10.5 billion as programme and project loans in the same period. “Thus, the net inflow of external loans is $2.98 billion.”

In addition, the minister said, the government also repaid $2 billion to Saudi Arabia during the current fiscal. Hence, the actual net inflows further decreased to $0.98 billion only.

It may be noted that the budgetary support helps the government bridge financing gap and provides fiscal space to make necessary expenditures. This fiscal space has helped the government to enhance its spending on social sector, especially health and social protection and mitigate the socioeconomic impact of the Covid-19 pandemic. The results of government’s successful lives and livelihood policy and other measures are also evident from 3.94% growth rate which not only saved the employment of millions of Pakistanis but also improved all major economic indicators.