The government has started borrowing massively during the current fiscal year as well, the country was already under huge debt during last four years of current government, the government already has the external debt of $58 billion reported earlier.
However, the government borrowed $19.66 billion during the last 4 years, but according to The Nation, the government has borrowed $35 billion in total during the last four years out of which $17 billion was only set aside to repay the previous loans. If this borrowing continues it could end up borrowing $6 billion in one year which could be the all-time high in the history of Pakistan.
The government borrowed $1.5 billion from July to September in order to sustain its depleting foreign exchange reserves. Nonetheless, facing severe criticism from the opposition and other departments regarding the hiking foreign debts, the government has again started borrowing from international financial institutions and countries.
The government claims that it has borrowed money to maintain the reserves that are dropped by $4.4 billion during the past one year due to fizzling out foreign currency inflows.
The foreign exchange reserves position is still under pressure, Pakistan’s official foreign exchange reserves of State Bank are $14.158 billion on top of that the government has to pay $5.8 billion for foreign debt servicing during the current fiscal year 2017-18.
The debt would probably increase in the next few months because the government now plans to issue Sukuk and Euro bonds in the international market to generate $2 to $3 billion to achieve a balance of payments.