Pakistan's per person debt rises nearly 50 per cent
Feb 03, 2022
Islamabad [Pakistan], February 3 : Pakistan per person debt rises to nearly 50 per cent according to the Fiscal Policy statement 2021-22 emphasising it is a fragile economy.
The Ministry of Finance has submitted a self-contradictory fiscal policy statement in the National Assembly that also hid critical information from legislators, undermining the spirit of the law that requires an objective explanation of fiscal indicators, as noted by Express Tribune.
The Fiscal Policy Statement 2021-22 also showed that the per-person debt burden increased to Rs 179,070 at the end of the last fiscal year - an additional liability of Rs 58,971 or 49 per cent on every citizen in three years since Prime Minister Imran Khan assumed office.
The statement has been prepared by the budget wing of the Ministry of Finance to comply with the requirement of the Fiscal Responsibility and Debt Limitation Act of 2005.
But the Ministry severely compromised transparency, objectivity and professionalism in the policy statement, also committing factual errors.
On January 20, the National Accounts Committee approved the rebasing of the economy to the fiscal year 2015-16 from the old base of 2005-06 to incorporate changes in the structure of the economy.
This expanded the size of the economy in 2020-21 to Rs55.5 trillion, up from the old base of Rs47.7 trillion. The increase in the size of the economy showed improvement in indicators like the budget deficit, debt-to-GDP ratio, but it further deteriorated the tax and revenue-to-GDP ratios, as analyzed by Express Tribune.
The Ministry of Finance used both the old gross domestic product (GDP) figure and the new one to explain the numbers as it deemed appropriate without caring for the objectivity, showed the document.
It also used the new GDP figure without formal approval of the rebasing of the economy by the governing council of the Pakistan Bureau of Statistics (PBS).
On the very next page, the budget wing used the old GDP size to wrongly prove a point that the budget deficit would fall further to 6.3 per cent of GDP during the fiscal year 2021-22, from 7.1 per cent in 2020-2, according to Express Tribune.
"In the fiscal sector, the government plans to continue with the adjustment measures, which are projected to reduce the deficit to 6.3 per cent of GDP during the fiscal year 2021-22, from 7.1 per cent in 2020-21," said the fiscal policy statement.
The Fiscal Policy Statement showed that the total public debt was recorded at Rs39.9 trillion at the end of June 2021. Resultantly, the public "debt per capita stood at Rs179,070 at end-June 2021". as noted by Express Tribune.
