Government not worried about increasing debt: MoF

Pakistan obtains $ 2.9 billion loans in December 2017, 35.9 per cent of total budget estimates

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ISLAMABAD: The federal government obtained $ 2.9 billion in loans from commercial banks, multilateral and bilateral institutions in December 2017 alone.

Documents available with Pakistan Today indicate that the federal government obtained $ 5.8 billion loans and grants from foreign banks and institution in the first six months of the current fiscal year 2017-18. That amounts to 71.7 per cent of the estimated $ 8.09 billion loans to be obtained for the current fiscal year in budget 2017-18. Meanwhile, the government had obtained $ 4.1 billion in first six months of the last fiscal year 2016-17.

The government received $ 1.16 billion from Commercial Banks in first six months out of which $ 1.09 billion loans were obtained in first five months and $ 71.60 million in December 2017. The government had estimated that it will obtain $ 1 billion from commercial banks.

In addition, Ministry of Finance has raised $ 2.5 billion through bonds in the first six months whereas it was estimated that only $ 1 billion will be raised through bonds during the year.

During the first 2 quarters of FY17-18, $ 443 million came from Asian Development Bank (ADB), $ 14.71 million from Asian Infrastructure Investment Bank (AIIB), $ 86.66 million from International Bank for Reconstruction and Development (IBRD), $ 143.50 million from International Development Association (IDA) and $ 1.07 million from UNHCR.

In addition to this, Inter-American Development Bank (IDB) gave $ 55.38 million, IDB (S-term) $ 695.21 million, $ 6.29 million from Infrastructure Fund for Agriculture Development (IFAD), $ 17.24 MDFT and $ 3.69 million from OPEC.

Documents further indicate that the government received $ 773.25 million loans and grants in different projects from twelve prominent countries including Canada, UK, and USA. $ 0.16 million from Canada, $ 506.92 million from China, $ 5.99 million from European Union, $ 10.32 million from France, $ 15.93 million from Germany, $ 67.70million from Japan, $ 1.53 million from Kuwait, $ 0.84million from Oman, $ 22.50million from Saudi Arabia, $ 5.00 million from Turkey, $ 105.51 million from United Kingdom and $ 30.85 million from USA.

The government obtained these loans under various heads such as the energy efficiency programme, social protection development, high way investment, Peshawar Sustainable Bus rapid train project, Shorkot to Khanewal motorway, Mohmand Dam, funds for Afghan refugees and Energy Efficient Investment Programme, documents stated.

An official while talking to Pakistan Today said that government is receiving all these loans and grants but the ministry of finance is not utilising the funds properly. These loans and grants are being used as petty cash for the daily affairs of the country, he added.

On Tuesday, State Bank of Pakistan Governor Tariq Bajwa, while briefing to Senate Standing Committee on Finance said that reserve situation is satisfactory; we do not need to go to International Monetary Fund (IMF).

The country needs $ 3 billion by the end of June this year, mainly for debt retirement and some other components leading to rising current account deficit, SBP governor further added.

It is pertinent to mention here that Pakistan has to repay $ 31.33 billion loans to international lending institutions in the next six years under the medium and long-term policy.

Ministry of Finance spokesperson said that the Pakistani economy is improving and raw cotton and rice exports have also started to increase. The budget estimates are prepared keeping in mind the domestic and global environment thus government of Pakistan reviews estimates accordingly; he said adding that the government is not worried about the increasing debt.

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