The country's external debt liabilities have virtually decreased substantially during the last seven years, State Minister for economic Affairs, Ms Hina Rabbani Khar said on Friday. Taking to a private TV, she said total external debt liabilities have been brought to $36.4 billion in June 2006 from $38.4 billion in 1999.
Tax to GDP ratio has also reduced significantly during the last seven years, adding the external debt liabilities were over 60 percent of GDP seven years ago. " Both external and domestic debt together stand at about 54 percent of GDP today," she said.
The decade of 80's was not suitable in terms of growth of debt as the debt liabilities on nation during the period were increased at the phenomenal ratio of 7.4 percent. Policy has been formulated to obtain concessional loaning only for development activities saying: We will continue to borrow from the international market for carrying out development activities." The average interest on international loans is less than one percent. In fact the real interest rate on most loans is negative, she said. Answering a question regarding payment on loans she said, "We actually prepaid domestic loans and not the external debts from the income generated from private proceeds."