Clarification

This is with reference to a news item published in Business Recorder titled "FY16 external debt, liabilities hit record $73bn level" dated 30.08.2016. "The news article mentioned that country's external debt and liabilities rose to historic level of $73 billion at the end of last fiscal year (FY16) while external public debt was $61.357 billion. In this regard, the following may be noted: "Out of total $73 billion, public external debt was $57.72 billion as at end June, 2016 as opposed to news article claim of $61.357 billion.

The clarity regarding public debt definition has been communicated several times at various forums, however, this news article is another attempt to deliberately mislead the readers by reporting the number which is inconsistent with the public debt definition as approved through Fiscal Responsibility and Debt Limitation Act; "External debt and liabilities were $61 billion at end June, 2013 and stood at around $73 billion at the end of June, 2016.

It is worth mentioning here that this increase may include effects of other factors such translational gain/losses, thereby simply taking difference of two stocks may not represent true picture; "Regardless of the absolute debt numbers, the debt burden is only understood in comparison to its relation with the GDP. The external public debt to GDP has reduced from 21 percent in 2012-13 to 20 percent in 2015-16, indicating a reduction in external public debt burden;

"The above facts clearly establish the fallacious views mentioned in the news item regarding the state of public debt management in Pakistan. The present government has made remarkable gains in reducing debt burden of the country and improved the fiscal and debt sustainability indicators," the clarification concluded.