As of June 2021, Pakistan’s public debt stood at Rs 40 trillion. An analysis of the country’s debt shows that one-third of it is foreign, and two-thirds is domestic. Domestic debt comprises investment bonds, treasury bills and the National savings scheme.
External debt is comprised of financial borrowing from multilateral lenders like the World Bank (WB), International Monetary Fund, and the Asian Development Bank (ADB). This also includes bilateral lenders like the Paris Club and several international commercial banks.
According to experts, foreign exchange represents a greater burden on the economy as this debt has to be paid to powerful entities and countries. Moreover, the dwindling exchange rate of the rupee also makes it difficult for the public exchequer to pay off the debt in due time.
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