Govt says debt servicing loans remains major fiscal challenge

The Finance Ministry has stated that debt servicing of huge domestic and external loans accumulated over the past one decade remains a major fiscal challenge.

The ministry while referencing an article appearing in a section of press, stated that during the first half of current financial year 2020-21, the Consolidated Primary Balance reflected a surplus of Rs. 337 billion (0.7 percent of the GDP) whereas, the overall Fiscal Balance was restricted to -2.5pc of the GDP against the annual target of 7.1pc.

It was further stated that the provincial surplus of Rs. 255 billion reflects healthy fiscal position of the provinces. The whole scenario transpires better fiscal management.

During the same period, 45pc of FBR Revenue target fixed for the whole year was realized, despite economic slowdown due to resurgence of COVID-19.

Unavoidable expenditures were incurred to mitigate the impact of COVID-19 and to help the vulnerable segments of society. However, debt servicing of huge domestic and external loans accumulated over the past one decade is the major fiscal challenge.

Through better debt management efforts are being made to reduce the debt servicing cost. With more revenue collection and controlled expenditures, the targets set for the whole financial year with regard to fiscal and primary balances will be met.