Against 76.7% public debt in the last fiscal year, the public debt may surge to 78.6% of the GDP by end of current fiscal year 2019-20. According to the Fiscal Responsibility and Debt Limitation Act of 2005, the public debt has to be lower than 60% of the GDP or Rs26.4 trillion. This means, the public debt will be at least Rs8.2 trillion higher than the limit set in the FRDL Act. The WB report noted that even in the next fiscal year, the public debt to GDP ratio would remain at 80.8%, increasing Pakistan’s exposure to debt-related shocks. The key reasons behind growing public debt were low revenues, higher debt and defence spending and currency devaluation.

Source: The Express Tribune October 16, 2019 18:11 UTC