Debt to GDP ratio increased to 66.5 percent: government procures $13 billion net foreign loans in three years

The government has procured net foreign loans of $13 billion during the last three years and consequently country's debt to Gross Domestic Products (GDP) ratio increased to 66.5 percent. The government obtained US $24.936 billion loans in last three fiscal years starting 2013 and retired US $11.946 billion with a net external borrowing of US $12.990 million while mark up paid during this period stood at US $2.748 billion.
This was stated by Director General Debt Finance Ministry Ehtesham Rashid during Senate Standing Committee on Finance held under the chairmanship of Senate Saleem Mandvilwala. He said that country public debt, excluding private sector and Public Sector entities, stood at $57 billion while non public debt, private sector and Public Sector, stood at $15 billion. He said that total public debt of the country stood at 66.5 percent with Rs 13.6 trillion domestic debt and $57 billion external debt.
He said that $1.5 billion Saudi gift was parked in the foreign exchange reserves and government was required to reduce the public debt to 60 percent by 2018 as per Fiscal Responsibility and Debt Limitation Act 2005. He said he does not know exactly whether China Pakistan Economic Corridor (CPEC) loans were included in the public debt or not but added that all the loans taken through Economic Affairs Division are included in the public debt.
He said that external sources mainly include loans from multilateral institutions, bilateral countries, issuance of bonds and recently issued Sukuk bonds are not part of $13 billion foreign loans because ministry has not received the data for the month of September. Total net domestic borrowings obtained since 2013 stood at Rs 3,114.187 billion and total domestic borrowing stood at 13.6 trillion. The committee members on the agenda item of rates of taxes on petroleum prices have expressed their displeasures and stated that as the petroleum process in the international market have decline, taxes were raised not to allow the benefit of lower prices to be passed on to the consumers. They suggested a uniform rate of taxes on petroleum prices instead of different rates. The meeting was informed that during the period from June 2013 to 2014, the rate of sales tax on all petroleum products was standard 17 percent ad valorem.
He said that from January 2015, sales tax rates on 5 regulated products ie Motor Spirit, HOBC, Kerosene, High speed Diesel and Light Diesel oil were changed on monthly basis to partly compensate for the short-fall in revenue due to reduction in petroleum prices. The meeting was informed that Finance Ministry has been deciding about change in sale tax rates on petroleum products as federal government has the powers to do so.