The ongoing depreciation of Pak rupee has added about Rs 315 billion to public debt without borrowing a single penny. The debt could go further up if efforts were not made to stabilise the currency, it has been reliably learnt on Thursday.
This is an extraordinary situation, wherein devaluation of Rs 7 against the dollar has increased the total debt, which according to financial managers, is $45 billion. The government wants about $4 billion inflows by end of the current fiscal year to maintain its foreign exchange reserves that have been declining owing to surging import bill. The trade deficit stood at little over $17 billion during the first 10 months of current fiscal year.
On top of that, Pakistan credit ratings have also come down because of negative macro indictors, the managers said, adding that Pakistan is faced with serious economic crisis that required extraordinary measures.
They said that the rupee's depreciation from 62 a dollar to 70 during last few weeks have fattened the debt and poses serious threat to the economy. They said although the State Bank of Pakistan has taken some measures but that, too, seems not to be working, leaving the economists confused.
The financial managers are of the view that the next budget could not be a normal as the government would desperately need to take some harsh decisions to correct the imbalances. If this situation continued, there would be a total economic collapse in the next six months, they warned.
They said the previous government is also responsible for this situation because it did not pass on the benefit of oil price differential since January last year to common man, despite the fact that the finance ministry kept asking them during every ECC meetings to partially or completely pass on this differential to end user.
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