Pakistan accumulates over USD10 billion in new debt during Covid pandemic
Mar 27, 2022
Islamabad [Pakistan], March 27 : Asian Development Bank released a report which states that Pakistan has accumulated over USD10 billion in new debt during the Covid-19 pandemic.
To manage the fiscal imbalance, the government massively stockpiled debt, which led to impacts on financial markets. A high fiscal deficit affects resource allocation among the private and the public sectors. In Pakistan, the borrowing of the government from banks constitutes more than 90 per cent of total loans, the report noted.
Pakistan's debt to Gross Domestic Product ratio was the highest in the Central Asia Regional Economic Cooperation Program (CAREC) region at 86 per cent in 2019 which increased in 2020, reading at 99 per cent, as per Business Recorder citing the ADB report named as "COVID-19 and Economic Recovery Potential in the CAREC Region".
The report further states that the debt sustainability analysis for the CAREC region that the overall risk of debt distress for Pakistan is high.
Pakistani government borrowed over 90 per cent of the total loans, the report added.
Pakistan has the third-highest debt services, which constitutes nearly 7 per cent or USD 15 billion of the total CAREC region in 2020.
The direct health costs of COVID-19 are highest in Pakistan which was around USD 2,019 million.
Earlier, on Friday, Pakistan Prime Minister Imran Khan claims that all economic indicators are going in the right direction and the International Monetary Fund (IMF) has stated that the Pakistan economy is moving in the right direction. The above report and claims by the government are contradictory.
Meanwhile today, the Pakistani PM is addressing the public which is dubbed as a "battle for the future" ahead of the Opposition's no-trust motion in the National Assembly.
Incidentally, the Opposition's marches from different cities, which are being led by Pakistan's People's Pary (PPP) and Pakistan Muslim League (Nawaz), are also going to reach Islamabad today.
Imran Khan's party Pakistan Tehreek-e-Insaf set to face a no-trust motion in the National Assembly. The session is called on March 28.
The Pakistani National Assembly has a total strength of 342 members, with the majority mark being 172. The PTI led coalition was formed with the support of 179 members, with Imran Khan's PTI having 155 members, and four major allies Muttahida Qaumi Movement-Pakistan (MQM-P), Pakistan Muslim League-Quaid (PML-Q), Balochistan Awami Party (BAP) and Grand Democratic Alliance (GDA) having seven, five, five and three members respectively.
