Pakistan’s total external debt and obligations reached $88.9 billion at the end of December 2017, reported State Bank of Pakistan.
As per data released by SBP, the external debt and liabilities increased by $13.2 billion in just one year.
Pakistan’s external debt increased by $5.3 billion during July-Dec 2017.
Out of total external debt, the government’s direct obligations are equal to $70.5 billion, which exclude guaranteed and public sector enterprises’ debt.
It maybe recalled that at the end of December 2016, Pakistan’s external debt stood at $75.7 billion. At that time, the country’s official foreign currency reserves were recorded at $18.6 billion. They reached to just $12.8 billion at the end of December 2017.
It must be mentioned here that experts had warned that Pakistan’s borrowing trend may take its national debt count to $90 billion by 2019. The number was, however, reached a lot earlier and the warning was clearly not heeded.
Debts increased on shoulders of expensive loans and issuance of bonds.
Servicing of debts (the interest on debts) account to around $7 billion an year. Meaning that, $7 billion would be required just to pay the interest on current amount of national debt.
Experts have said that international financial firms could ask Pakistan to cap its nuclear program if the debt rose to a level where a bailout would be an only option for the country.
keeping in view the lowering forex reserves, experts have opined that $100 billion would be a figure where Pakistan would need a bailout; a move that could sabotage the country’s nuclear program.