While Pakistan has been in the news for the wrong reasons in the last four days, here is a brief story of the financial situation of that country.
As per a report by the State Bank of Pakistan, the debt and liabilities of Pakistan are shooting up rapidly. At the end of 2018 it was Pakistan Rupee (PKR) 33.3 trillion. The last six months of 2018 witnessed an addition of PKR 3.4 trillion.
The Pakistan government, with Pakistan Tehreek-e-Insaf in power, has been unable to keep its promise of reviving loss-making enterprises, because it has failed to control the losses. With a net addition of PKR 192.6 billion (13.8%) in the past six months, the public sector enterprises summed up losses to PKR 6 trillion.
The central bank also said that Pakistan owed up to USD 99.1 billion to external creditors, for the period ending December 2018. The finance ministry has adopted a new step: take new loans to repay the old ones.
Foreign exchange liabilities soared to $7 billion at the end of 2018, with a 36.4%, or $1.9 billion in the last six months.
In the six-month period, while the domestic liabilities of Pakistan dropped from Rs 819 billion to 734 billion, the external liabilities have soared from PKR 622 billion to PKR 970 billion, courtesy loans taken from China and Saudi Arabia.
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