Pakistan needs more loans to pay off its debts

The spread of the corona virus has damaged Pakistan's economy and slowed growth.

Pakistan  seeks more debt to pay off its past debts. 

Expressing concerns over Pakistan's growing debt, the Institute for Policy Reforms, a Pakistani non-governmental think tank Reported a threatening situation towards national security.

According to earlier data released by the Central Bank of Pakistan, after the increase in the country's debt volume by more than 14 trillion over the past two years by the end of June 2020 Pakistan's total outstanding debt has surpassed 44 trillion. 

The NGO's report on Pakistan's growing debt comes at a time when a report by the National Electric Power Regulatory Authority has revealed that by the end of the last fiscal year 2020, Pakistan's revolving debt in the energy sector stood at 2,100. Billions have been exceeded.

Economists say Pakistan's power sector debt and losses and rising debt in Pakistan are a cause for concern and it is a challenge for the government to deal with these issues. The increase in revolving loans in the power sector is becoming a burden on the economy.

The increase in revolving loans in the power sector is becoming a burden on the economy.

Farrukh Saleem, an economic analyst whiling closing option for increasing tax net, suggested that the government could better deal with the debt crisis by reducing the burden of growing fiscal deficits caused by the power sector and government-sponsored industries.

According to him, in the financial years 2019 and 2020, the government has a burden of Rs 1800 billion every year on deficits and other expenditures of government-sponsored industries.

Although the government is of the view that it is not possible to increase revenues due to economic difficulties in the country, economic analyst Farah Sohail emphasized on the possibility of reduction on the country's growing debt, 'we need to focus on reducing the economic deficit," he said.

On the other hand, Farah Saleem says that the reason for the increase in Pakistan's economic deficit is the country's revolving energy sector loans, which are increasing every year. According to the experts, the revolving debt of Pakistan in fact, has now exceeded 2300 billion.

Many factors have affected the production of the industrial sector.

Many factors have affected the production of the industrial sector.

He said that the the manifesto of Pakistan Tehreek-e-Insaf (PTI) clearly defines the priorities of the country's economy  which addresses the issues of government-sponsored deficit industries and commercial enterprises. However, practical steps in this regard have yet to be taken in.

Abid Silhari, an economist, says the government should focus on reducing unnecessary spending, but on the other hand, cutting spending on development projects may not be appropriate.

Abid Silhari didn't show any possible signs of good news about the current state of the Pakistani economy during the current financial year.  The uncertainty is further, increased with COVID-19 situation. Small businesses are now the need of the hour.

Pakistan's Prime Minister Imran Khan tweeted about increase in the the country's balance of payments over the past month due to an increase in remittances and exports.

Speaking at an online meeting under the International Monetary Fund (IMF), Hafeez Sheikh, Pakistan's finance adviser, said the corona virus had affected the success of the Pakistani economy.

However, finance adviser Hafeez Sheikh warned about the possibility of the government needing more loans to provide financial resources to the citizens living below poverty line, due to the slowdown in financial growth.

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