Gaping hole: Pakistan borrowed $35 billion from 2013-2017 for repayment of maturing debt

ISLAMABAD: The PML-N led government added a colossal amount of $35b in loans from 2013 to 2017, for repayment of maturing debt said a local newspaper report.

Profit had reported last week that federal cabinet legitimized approximately $2 billion which were obtained by the government during the first half of 2017 without taking definitive approval from the cabinet.

During PML-N’s rule, Pakistan’s external debt augmented from $61 billion to $83 billion which makes it a whopping $22 billion addition in just four years.

The $1.965 billion borrowings were part of a record-breaking $4.4 billion short-term foreign commercial loan that the Pakistan Muslim League-Nawaz (PML-N) government had obtained during FY 2016-17 that ended on June 30. Out of this, $2.3 billion came from Chinese financial institutions alone.

The Finance Ministry got $275 million from Citibank on June 30 – the last day of the fiscal year. It also signed a common term agreement with Standard Chartered Bank on June 20 for $700 million loan – just 10 days before the close of the fiscal year.

Till the dismissal of ex-PM Nawaz Sharif, the government had obtained a colossal amount of $35b in loans during his four years at the helm for repayment of maturing debt and keep foreign currency reserves at a level to paint a picture of economic stability to investors.

Around half of these $35b loans obtained were used to pay off previous debt from July 2013 to June 2017. During its four-year tenure, the PML-N has added a record $17b to Pakistan’s external debt and liabilities which is a record for any government.

In last nine years, $43b have been added to Pakistan’s external debt, which is 50pc more than the external debt and liabilities added since independence said former director general of debt, Ministry of Finance Dr Ashfaque Hassan.

He warned the country’s balance of payments position was dangerous and predicted current account deficit (CAD) will touch $18b by end of current FY 2017-18.

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