PTI govt improves economy despite inheriting elevated level of debt servicing: Fawad

Federal Minister for Information and Broadcasting Chaudhry Fawad Hussain Wednesday said all the indicators point towards improvement in the national economy despite the outbreak of coronavirus pandemic in the country, reported 24NewsHD TV Channel.

“When the PTI government came to power Pakistan was facing daunting challenges such as high current account deficit which was brought down drastically due to incumbent government's sound fiscal policies. All high-frequency data now shows improvement in the economy and growth rate is being predicted about 3.94 per cent.”

He said the PTI government inherited an elevated level of debt servicing over $10 billion/year caused mainly due to enhanced external borrowing ($49.76 billion), especially short-term & expensive commercial loans ($17b) by the PML-N government.

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

Fawad said during the first 10-months of FY2020-21, the government has repaid an amount of $7.52 billion including $6.31b as principal & $1.21 billion as interest payments.

“In order to discharge its various obligations, the government borrowed $10.5 billion as program and project loans in the same period. Thus, the net inflow of external loans is $2.98 billion. In addition, the government also repaid $2 billion to Saudi Arabia during the current fiscal year. Hence, the actual net inflows further decreased to $0.98 billion only.”

He said the budgetary support helps the government to bridge the financing gap and provides fiscal space to make necessary expenditures.

“This fiscal space has helped the government to enhance its spending on the social sector, especially health and social protection and mitigate the socioeconomic impact of COVID-19 pandemic. The results of government’s successful lives & livelihoods 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.”