'$2.29 billion external public debt in FY 2018-19 lowest in three years'

ISLAMABAD: The net addition to external public debt during fiscal year 2018-19 was only $2.29 billion, which is the lowest in the last three years, said the Economic Affairs Division in a statement on Friday.

The total external inflows during FY 2018-19 were $10.186 billion, including grants of $330 million, while external loans obtained by the government during the year were $9.85 billion with the government making payment of $8.94 billion on account of retirement of external debt and debt servicing.

“The net addition to the external public debt was only $2.29 billion which is the lowest of last three years,” reads the statement.

It said that the net additions to the external public debt during the last three fiscal years i.e. FY 2015-16 to FY 2017-18 were $6.82 billion, $4.77 billion and $8.64 billion respectively.

The Economic Affairs Division further said that the ADB and World Bank disbursed $541.17 million and $652.75 million respectively during FY 2018-19 as compared to $945.69 million and $817.54 million during FY 2017-18.

It said a slowdown in disbursement from development partners during the outgoing fiscal year was mainly due to a period of political transition in the country. During the interim government, there was a complete ban by Election Commission of Pakistan on new development projects and relevant competent forums i.e. ECNEC and CDWP were not in place for quite some time.

“After the formation of the elected government, the Provincial Governments’ Annual Development Plans were approved at a very delayed stage. Consequently, approval of new lending operations and project-related disbursement were slow during the initial months and started to pick-up during the second half of the year.”

“It is important to note that budgetary support was also not available due to weak macroeconomic position inherited by the present government.”

The Economic Affairs Division further said for the future, the government is working on a strategy whereby procurement of long term concessional financing from multilateral and bilateral sources is a priority.

“With the restoration of confidence of international financial institutions and good prospects of budgetary support, the government is expecting very strong inflows from its development partners this year. Acquiring commercial financing is not a priority; the government resorts to commercial borrowing only as a contingency measure to strengthen foreign exchange reserves and to maintain stability in the market. These commercial finances are acquired after full due diligence, at the best possible rates and have the approval of a competent forum which in this case is the Federal Cabinet, concluded the statement.”