The government of Pakistan is planning to borrow another 15 billion over the next financial year, of which more than 10 billion will be used to repay old loans, while the rest will help stabilize the country’s foreign exchange reserves.
Finance Ministry sources say that if the government manages to manage the 15 billion debt, it will be the largest loan in any financial year in the history of the country and the country will be burdened with more debt.
Like the previous government, the Pakistan Tehreek-e-Insaf (PTI) government has failed miserably to get rid of debts, increase domestic exports, increase remittances and bring in foreign direct investment.
At present, the 12 billion in foreign exchange reserves held by the State Bank of Pakistan are all in demand. This is the same situation as it was during the PML-N era. In its April report, the IMF set the SBP’s foreign exchange reserve limit at 15.6 for the fiscal year 2020-21, which it finds difficult to obtain without further borrowing as domestic exports have increased marginally while overseas Remittances from Pakistanis appear to be declining slightly.