Economic survey: no economic target achieved in 2011-12

[yazdi]

Re: Economic survey: no economic target achieved in 2011-12

@Ali_Syed

^ even if we consider the inflation the borrowing has increased from 100 to 138 billion dollars, do you think thats normal? In the mean while our foreign debts have also increased from 40 billion to almost 65 billion dollars. That means our combined debt in 60 years was 140 billion dollars which has jumped to 203 billion dollars (jump of 65 billion dollars) in four years, and still no visible sign of improvement.

You have to see debt as a percentage of GDP.. It is the cumulative total of all government borrowings less repayments that are denominated in a country’s home currency. Total Debt has grown from US$100 billion to US$138 billion (12 trillion rupees). That’s an increase of 38% and 38 billion dollars. I don’t know from where you got your 203 billion dollars. And a lot of this increase in debt is not physical borrowing by the government but just recalculating the foreign debt at today’s dollar/rupee parity. It’s true we are not getting cheap foreign loans due to the strategic reasons you are well aware of.. the government is borrowing mostly from domestic financial sector putting pressure on liquidity position and interest rates..

If you see the chart from the link I have posted.. Debt is not a big problem for Pakistan. The main problem is the debt servicing due to high interest rates. If somehow the interest rates can come down like in Mush era.. it will release a lot of stress from the government and can give an extra boost to the productive sector..

Like I said our numbers are not bad.. we have a management issue in Pakistan..