ISLAMABAD    -    The government has prepared a plan to borrow more than Rs11 trillion in the next four years to meet the financing needs of the country.

The government in its five-year debt management plan has projected that Pakistan would borrow Rs11.075 trillion in next four years. The break-up showed that the government would take Rs4.177 trillion from the foreign sources and Rs6.898 trillion from the domestic sources in the fiscal years from 2019-20 from 2023-24. In the plan, the government has projected that the ratio of domestic debt will be raised to 70 percent while that of external debt to be lowered to 30 percent.

Pakistan would borrow Rs3173 billion from external as well as internal sources during current fiscal year. The data of the ministry of finance showed that government would borrow Rs1801 billion from domestic sources while Rs1372 billion from the foreign lenders during the year 2019-2020. However, the government has devised a strategy to reduce the foreign loans and increasing domestic borrowing from the next financial year. The strategy showed that Pakistan would borrow Rs2613 billion in upcoming fiscal year 2020-21, in which the government would take domestic loan of Rs1603 billion and Rs1010 billion from the external sources.

Furthermore, the volume of borrowing would reduce to Rs2071 billion in the year 2021-22, as the government would take loan of Rs653 billion from external and Rs1418 billion from internal sources. The data showed that Pakistan would borrow Rs1612 billion in the year 2022-23.

The breakup showed that government would take Rs630 billion from foreign lenders and Rs982 billion from domestic sources. The government has stated that volume of overall borrowing in the year 2023-24 would further reduce to Rs1606 billion. The country would take Rs83 billion from external and Rs1523 billion from internal sources in the fiscal year 2023-24.

The country’s total public debt would increase by 47 percent in five years to Rs45.57 trillion. According to the Public Debt Management Plan for the fiscal years 2020-24, the Ministry of Finance also estimated the total external debt increasing by 80 percent to Rs18.77 trillion in FY24 from Rs10.446 trillion at present. On the other hand, the plan estimates the total domestic debt to increase by over 30 percent to reach Rs26.8 trillion by FY24 from Rs20.57 trillion at the end of FY19.

The International Monetary Fund (IMF) in its report, the Fiscal Monitor 2019, had projected that Pakistan’s general government debt at 76.7 percent of the GDP in last fiscal year. However, it estimated that debt would further go up to 78.6 percent in ongoing fiscal year (FY20).

Later, from next year, the debt would start declining and projected to come down to 76.1pc of GDP. The debt-to-GDP ratio will further reduce to 72.5 percent in FY22 followed by 69 percent in FY23 and 65.4 percent in FY24.