The incumbent government has borrowed $10.844 billion from multiple financing sources including $2.206 billion from foreign commercial banks during the fiscal year 2022-23 compared to $16.974 billion borrowed during the same period of 2021-22 (by Pakistan Tehreek-e-Insaf government), showing a decline of around 37 percent.
Facts are always sacred, so to speak. Although there has been a significant decline in external borrowing, both the governments —Pakistan Democratic Movement’s (PDM’s) and PTI’s — are responsible for the country’s current economic woes. Both of them showed a lot of fiscal indiscipline, pushing the country towards the verge of sovereign default.
Fiscal indiscipline, in fact, has been the hallmark of every government since the 2008 general election that catapulted Pakistan People’s Party (PPP) to power. Facts and figures clearly show that there has been an astronomical rise in the country’s external and domestic debts since 2008.
That is why perhaps country’s debilitating debt crisis is still far from over despite the fact that the country has recently received a lifeline from the International Monetary Fund (IMF).
The country is still in the throes of a crisis because of galloping inflation, falling foreign exchange reserves, the rupee slide, uncompetitive and undiversified export basket, growing fiscal indiscipline, increased debt pressures, and lackluster business environment.
The economic mess, therefore, cannot be fixed even in medium term, given the enormity of the challenge facing the nation at this point in time. It can be plausibly argued that there is a general air of despondency about the state of our economy. In other words, a mood of despondency has set in despite IMF’s bailout.
Hamid Warraich (Rawalpindi)
Copyright Business Recorder, 2023
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