KARACHI: Newly appointed Minister for Planning and Development Asad Umar on Saturday said that circular debt was the major challenge for the incumbent government, ARY News reported.
Addressing a press conference in Karachi, Asad Umar said that the country’s external debts were hindering economic growth. He said that the economy will strengthen by paying loans.
Asad Umar said that China Pakistan Economic Corridor project was not a burden on the economy and noted that CPEC related debt out of 18 billion dollars is 4.9 billion dollars. He said CPEC loan is 7 percent of the total external debt.
The minister said the loans were taken in the past as imports exceeded exports of the country and trade deficit was increasing.
He said, “Total public debt of the country stands at 74 billion dollars. Of this, the debt from China is 18 billion dollars, less than one fourth.”
Umar said Chinese institutions funded Pakistan at a difficult economic time due to deep friendship bonds between the two countries. He expressed satisfaction that commercial bilateral debt with China will start reducing at a faster pace in the coming years and will be replaced by multilateral debt.
The minister said that public debt taken from China has a maturity of 20 years with an average interest rate of 2.34 percent.