Pakistan trapped in rising foreign debt


People of Pakistan is facing high inflation. Rising foreign debts and low tax recovery had became a big problem for Pakistan. For this reason, government’s income has decreased and it is having very few amounts left for people’s welfare. As a result Pakistan had borrowed more money than previous year. According to the Ministry of External Affairs they had borrowed an amount of USD $580 million this year which is 18 percent higher than previous year. 

To recover from this problem, Pakistan have started collecting tax aggressively. They have a target of Rs 8 trillion tax collection this year. As per their own assessment there are only 3 million tax payers in Pakistan out of 220 million population. This is the main reason for government’s low income. Pakistan’s total debt crossed 50.5 trillion Pakistani rupees, approximately $283 billion.

Pakistan is in the gray list of Financial Action Task Force. For this reason, no industry is ready to invest there. As a result, unemployment is rising and government is also getting less tax. Above all recently IMF (International Monitory Fund) have rejected Pakistan’s borrowing request. Pakistan imports more or less 80 per cent of its oil and diesel from foreign countries and cost of electricity in Pakistan is already very high as compared to some of the neighboring countries like India and Bangladesh. Even common people is struggling to get basic food item because of high price for inflation.

In this particular point of time people of Pakistan are struggling for basic necessities like health, education, employment. But unfortunately, government’s priority is not people and their suffering. That’s why they have allocated $7.85bn for defense and only $151m for health in the budget of financial year 2020-21. Government of Pakistan admitted that for lack of resources they are spending less in people’s welfare. The amount they are borrowing is increasing day by day and Pakistan is trapped completely in a vicious cycle. They have to borrow more to pay the previous debt with interest.

Now very simply we can say that, Pakistan is in a verge of economic collapse. Trade deficit is widening along with increasing inflation. IMF now have started interfering in Pakistan’s internal economic policies. Now, Pakistan do not have enough money to run the country. Recently, Saudi Arabia had given them a loan of 4.2 billion dollars. But for IMF restrictions they cannot spend the money from their own reserve bank. Unfortunately, the people will suffer and they have to pay more taxes. It can damage the industries of Pakistan also according to American economist Dr. Laffer.

No doubt now Pakistan is going towards an economic slavery. They can come out from this vicious cycle of debt only if they plan their economic affairs properly.

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Taliban Repays Support Shown by Pakistan By Blowing Mosque - Facts and Figures
1 month ago

[…] Pakistan who is already in rising foreign debt needs to deal with TTP strictly to prevent Peshawar and Khyber Pakhtunkhwa as a whole from plunging into the darkness of violence and instability. The TTP has already called off an indefinite ceasefire and is aiming to decimate the security forces. The Pakistani civil-military leadership led by Prime Minister Shehbaz Sharif has vowed to show zero tolerance to TTP. Emboldened by the US promise of providing support, Pakistan’s leadership is most likely to conduct ground and drone strikes. The Sharif government, it seems, is preparing for a tough response against the TTP. It is believed that nearly 7000 to 10000 insurgents belonging to TTP reside in Afghanistan. […]