ISLAMABAD   -   The government is paying huge price of past borrowing as the country repaid $7.3 billion as principal amount as well as interest payment during nine months of the current fiscal year.

The debt servicing of the country is rapidly increasing with the passage of the time, which is pushing pressure on the country’s external sector. The break-up of Rs7.3 billion showed that Pakistan had repaid $5.184 billion as principal amount and $2.05 billion as interest payment during nine months (July to March) of the ongoing fiscal year. The massive repayment of loans is eroding the country’s foreign exchange reserves and forcing the government to take new loans.

According to the data of State Bank of Pakistan (SBP), the country had repaid $2.45 during first quarter (July to September), $2.43 billion in second quarter (October to December) and $2.35 billion in third quarter (January to March) of the current fiscal year, making total payment at $7.3 billion in nine months. Keeping in view the current trend, the amount could surge to $10 billion by the end of ongoing financial year.

The massive repayment is continuously declining the reserves. The foreign exchange reserves of the country held by the SBP have tumbled to $8 billion due to the massive repayment last week. “During the week ending 17 May, SBP’s reserves decreased by $788 million to $8,057.6 million, due to external debt servicing and other official payments,” the SBP stated on Thursday. The overall foreign exchange reserves including of commercial banks have recorded at $15.13 billion.

The government is paying huge amount to repay against previous loans and interest payment. The successive governments had massively borrowed in last 72 years. Pakistan’s total debt and liabilities skyrocketed to Rs35.094 trillion till end March 2019. Total debt of the government in accordance with definition of Fiscal Responsibility and Debt Limitation Act (FRDLA) stood at Rs26.368 trillion. Pakistan’s external debt and liabilities surged to $105.84 billion by the end of March 2019 following the massive borrowings made by the successive governments. The country’s debt and liabilities had gone up by $10.6 billion in nine months (July to March) of the ongoing fiscal year, according to the latest figures of State Bank of Pakistan (SBP). The debt and liabilities had increased to $105.84 billion in March 2019 from $95.24 billion in June 2018, showing an increase of $10.6 billion.

The successive governments in Pakistan had massively borrowed from external as well internal sources to meet the twin deficits including budget and current account. The governments had failed to enhance the country’s exports, which stood at $23 billion only. The incumbent PTI government, which criticized previous governments for borrowing, had also made significant borrowing since coming into power. The government had borrowed $9 billion from three friendly countries in last few months. Pakistan had borrowed $4 billion from China, $3 billion from Saudi Arabia and $2 billion from United Arab Emirates (UAE).