Pakistan's Prime Minister Imran Khan has claimed that during his two-and-a-half-year rule, Pakistan has repaid 20 billion dollars in external debt, a record repayment of external debt.
The Pakistan Tehreek-e-Insaf (PTI) has repaid 20 20 billion in external debt during its two-and-a-half-year rule, but during its tenure, the country's total external debt has reached an all-time high.
What is the total debt on Pakistan?
The total amount owed to Pakistan is currently more than 5 115 billion. As of December 31, 2020, the country's total debt was 115.756 billion, according to data released by the State Bank of Pakistan. According to economists, the government has repaid the debt, but in order to get rid of this external debt, it has taken a new debt and put more debt burden on the country.
One year ago, on December 31, 2019, it was .7 110.719 billion, which means that the total debt owed by Pakistan increased by 5 billion dollars in one year.
Abdul Rehman Warraich, director general of the debit office at Pakistan's finance division, told the BBC that the figures released by the SBP spoke of the country's overall external debt.
This loan includes loans taken by the government of Pakistan as well as loans taken by government-run entities, as well as loans taken from abroad by companies operating in the country's private sector. Including debt. This money is owed not only to the government but to the whole of Pakistan.
Talking about the government loan taken from abroad, Abdul Rehman Warraich said that this loan is 80 billion dollars. The government borrows from external and internal sources, he said. If you look at government loans, one-third of these loans were obtained from external sources and two-thirds of the loans are borrowed from internal sources, ie local banks.
He said that the ratio between the country's GDP and debt is about 30 percent.
How much external debt was repaid in the past and present?
According to Prime Minister Imran Khan's claim, the current government has repaid 20 20 billion in external debt during its two and a half years in power.
Yousuf Saeed, head of research at Darson Securities, said the prime minister's repayment of external debt was confirmed by official figures.
He said that a review of the data released by the State Bank of Pakistan shows that since the inception of the present government till December 31, 2020, this government has repaid the external debt of. 20.454 billion.
He said that if we look at the repayment of external debt during the first two and a half years of PML-N government, it was worth 9. 9.953 billion. According to him, the PPP had repaid an external debt of 6. 6.454 billion in the first two and a half years of its rule.
When asked if the present government has set a record of repayment of external debt, Abdul Rehman Warraich said that if looked at in terms of statistics, it would definitely be the highest. But we have to look at it in the context of the size of the economy because as the size of the economy has increased, so has the borrowing and the repayment has increased accordingly.
He stressed that it is only fair to look at debt and its repayment from the perspective of the economy.
Abdul Rehman Warraich said that more than 90% of the repayable loan is the principal amount and the interest payment is very low.
He said that the interest rate on foreign loans is very low and it is up to two to three percent and its repayment is long term.
He said that the average maturity period of Pakistan's external debt repayment is seven years which is considered to be a very good period and that is why foreign lenders also rely on Pakistan for its ability to borrow and repay.
He said that every year eight to ten billion dollars of external debt due to Pakistan matures for repayment. According to him, in order to repay this, a new loan has to be taken, along with additional loan for the budget deficit, which is about five billion dollars.
Economist Qaiser Bengali said there was no need to deny the Prime Minister's repayment of the 20 20 billion loan if it was confirmed by official figures, but it remains to be seen whether the external debt is Pakistan's own resources. Repaid by producing or repaying old loan by taking new loan from abroad.
Qaiser Bengali said that this is what has been happening so far and it is still happening that a new loan has been taken out to repay the foreign loans which government data shows that the value of loans taken from abroad is constantly increasing.
It may be recalled that despite the repayment of 20 billion in foreign debt by the government, the external debt of the country increased by 5 billion between December 31, 2019 and December 31, 2020, from 110 billion to 115 billion dollars.
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