The federal government’s debt has increased to a whopping Rs26.5 trillion, following a net addition of Rs2.24 trillion in just the past five months. This includes almost three and a half months of the incumbent government that is led by the Pakistan Tehreek-e-Insaf (PTI). Debt figures for July-November 2018 suggest that the finance ministry currently lacks a credible strategy to deal with the growing public debt and has resorted to breaching the SBP Act 1956 which mandates the retirement of central government debt from the central bank, instead of adding to it. Moreover, the country has seen inflows slow to a trickle with a steep shortfall in tax revenues, coupled with uncontrolled spending on debt servicing, also adding to the debt burden. The ballooning public debt remains a concern due to the previous government’s inability to attract non-debt creating inflows and enhance tax revenues.

Source: The Express Tribune January 09, 2019 05:03 UTC