Post Musharraf Pakistan External debt Increases by $12.9 billion !

Pakistan’s external debt and liabilities surge to $50.9 billion.from $38 billion.


Islamabad, 03 April, (Asiantribune.com): Pakistan’s external debt and liabilities (EDL) surged to $50.9 billion in the first six months of current fiscal year (July-December) from $46.3 billion in end-June 2008, reveals “Review of Economic Situation”, released by the Finance Ministry.

The EDL has gone up to 31.2 percent of projected Gross Domestic Products (GDP) of current fiscal year that was 27.6 percent by end-June 2008.

According to the review, foreign investment saw a decline of 34.2 percent in first eight months (July-February) from $2.873 billion to $1.89 billion.

A negative growth of 5.4 percent was recorded in the Large Scale Manufacturing (LSM) during the period under review against a positive growth of 5.2 percent for the same period of last year.

The LSM is victims of energy shortage along with rising cost of doing business and deteriorating law and order situation in the country. The review said that LSM growth was hit hard by sharp reduction in demand from both domestic and external sectors.

The further demand compression in the export sector is estimated at 5 percent. The inflation surged to 23.5 percent with food inflation touching as high as 28.9 percent during the period. The non-food inflation was recorded 19.3 percent and core inflation 17.8 percent.

An increase of 4.3 and 0.5 percent was witnessed both in exports and imports respectively. The exports went up from $12.482 billion a year ago to $13.015 billion while imports increased to $21.878 billion from $21.776 billion during the said period. Trade and current accounts deficits recorded a marginal decline. The current account deficit declined to $7.5 billion from $8.6 billion of July-February last year.

The review said that Pakistan witnessed major disruption in its normal economic activities as the fallout of the war on terror spread into settled areas of Pakistan. The outlook for economic growth more pessimistic, imports demand shriveled, tax collection declined and inflow of foreign investment and privatization dampened.

Pakistan economy still faces pressure from higher inflation, driven by spike in food prices, the acute power shortage, bewildering stock market, a perceptible slowdown in the manufacturing and services sectors; lower than anticipated inflows and growing financing requirements.