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Important Points highlighted by the Minister for Planning and Finance in Seminar on ‘Public Debt – Issues, Challenges and Way Forward’ scheduled to be held on 11-07-2018.

Dated : 11 July 2018

The minister for Planning while talking on the occasion commended Ministry of Planning, Development & Reform for taking this initiative to provide real picture of the public debt and remove the misconceptions being spread in the public debates and media.
She further maintained that the Public debt should not be measured in isolation whereas it is governed under Fiscal Responsibility and Debt Limitation Act (FRDLA), 2005 and according to this Act, public debt has to be reduced to 60 percent by 2017-18 and thereafter a 15-year transition has been set towards a debt-to-GDP ratio of 50 percent. The minister said that the Public debt witnessed average annual growth of 11.3% during FY 2013 to May 2018. She informed that public debt mainly increased due to fiscal deficit, IMF loan, balance of payments requirements and rupee depreciation against the dollar. She said that around 33 percent of total public debt is denominated in foreign currencies with an average life of around 8 years. The minister further stated that during the last five years, several structural change were witnessed in the composition of external public debt with increased share of commercial borrowing however, there is a need to reduce reliance on this source of financing. The minister suggested that government has to emphasise on obtaining concessional and long-term external financing to avoid higher debt servicing and putting in place fiscal consolidation measures by reducing fiscal deficit to below 4 percent as mentioned in Fiscal Responsibility and Debt Limitation Act (FRDLA), 2005 and reducing the public debt to GDP ratio to 50 percent through increasing tax revenue and expenditure management. Concluding her speech, the minister reiterated that debt is a reality for growing economies. Pakistan is also a developing country and it has to pursue its high growth ambitions to expand its infrastructure and has to invest in the social uplift of the country. Secretary Planning Mr. Shoaib Ahmed Siddiqui while giving his welcome remarks maintained that it is very encouraging and appreciable to see that the economic stakeholders have gathered under one roof to discuss the upcoming challenges and way forward. He noted that the policy makers in the government are quite aware to redefine debt dynamics through innovative product structure such as issuance of floating rate debt which attracts market participation. He said that the government is also devising strategy to enhance its exports sector through stimulating business community, public private partnership and adopting innovating approach. The seminar was attended by the senior government officials, policy advisers and the experts who spoke on the occasion included Mr. Ehtasham Rashid DG Finance Division, Dr. Pervaiz Tahir, former Chief Economist Planning Commission, Rai Nasir Ali Khan, Joint Chief Economist (Macro), Ijaz Wasti, Senior Officer of the economist group and Shoaib Bashir Khan, Chief Money and Pricing.