ISLAMABAD: Federal Minister for Industries and Production Hammad Azhar on Saturday underscored that the PTI government paid $10.4 billion on account of debt servicing of external public loans including principal payment of $8.5 billion and $1.9 billion in interest payments.
The minister was responding to the reportage of the Annual Report on Foreign Economic Assistant (FEA) for FY19-20 which highlighted Pakistan’s increased reliance on foreign commercial loans.
The country recorded total external loan inflows worth $10.7 billion in the year ended June 30, 2020. Additionally, the government raised $3.4 billion through foreign commercial loans to meet external debt obligations and support the balance of payments.
“The PTI government is conducting the highest external debt repayment and servicing ever done by any government,” he wrote on Twitter.
“Despite this high debt retirement, pace of external debt rise is slower than during the last years of PML-N government. And foreign exchange reserves are also rising.”
The report shows 74% of the total disbursement was for ‘financing and budgetary support’ while 19% was for ‘project financing’ and the remaining 7% for ‘commodity financing’, mainly from the IsDB to purchase crude oil.
The transport and communication sectors received the largest chunk at 32%; the rural development, poverty alleviation and education sectors received 11% each; the energy and power sector 10%; and healthcare 9%.
The report stated that 97% of the total $10.7 billion in inflows were accounted for as loans, while 3% were grants. Of the total disbursement, 53% [$5,645 million] came from the Asian Development Bank (ADB), Islamic Development Bank (IsDB), Asian Infrastructure Bank (AIB) and the World Bank (WB).
Foreign commercial banks accounted for 32% ($3,373 million), while 15% ($1,644 million) was given by bilateral development partners, including the Kingdom of Saudi Arabia, China and the United Kingdom.
