Pakistan’s debt and liabilities have risen to 68 percent of the total size of economy or 15.2 trillion Pakistani rupees, a level which is all time high, according to data released by State Bank of Pakistan (SBP).
According to SBP, the increase in the debt burden is mainly the result of a federal budget deficit and Pakistani rupee depreciation. Excluding liabilities, Pakistan’s total debt stood at Rs 14.5 trillion or 65.3 per cent of the country’s GDP as on September 2012, the data showed.
The International Monetary Fund (IMF) has recently asked the government to reduce debt as it was too high to be sustained. According to the Fiscal Responsibility and Debt Limitation Act of 2005, total debt should not exceed 60 percent of GDP.
According to the SBP figures, domestic debt has surged to Rs 8.2 trillion, 53.6 percent of total debt and roughly 37 per cent of GDP (Gross Domestic Product). GDP is the monetary value of all the finished goods and services produced within a country’s borders in a specific time period.
The government in the last three years has tried to float USD 500 million worth of exchangeable Euro bonds backed by shares of blue-chip company Oil and Gas Development Company. However, deteriorating economic conditions and Eurozone debt crisis have so far left all such attempts unsuccessful.