Source: Dawn
Date: Aug 6, 2010
KARACHI, Aug 6: Pakistan paid a staggering $5.6 billion as debt servicing during the last fiscal ended on June 30, which was 43 per cent of the official foreign exchange reserves of the country.
The State Bank reported on Friday that the country paid $4.632 billion as principal amount while $1.007 billion was paid as interest on the entire foreign debt and liabilities.
This massive payment was possible mainly because of continued higher inflows from IMF, overseas Pakistanis, US aid and loans from other donor agencies.
Analysts said the increasing debt servicing has the potential to put the country once again in trouble while the only thing that may correct the situation was the effort to maintain and increase the foreign inflows.
The foreign debt of the country sharply rose during the last fiscal as the government borrowed from international donors to remain liquid for such huge payments while it has been facing current account deficits for years.
The foreign debt increased by $3.295 billion to $55.628 bil lion during the last fiscal. It included $8.077 billion IMF loan mostly received as the emergency loans to avoid default.
The foreign exchange liabilities of the country noted slight decline as it reached $1.122 billion from $1.274 billion a year ago.
For more information: http://epaper.dawn.com/ArticleText.aspx?article=07_08_2010_017_013
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