The Pakistani publication further said that the main chunk of this circular debt is related to capacity payments, which can be categorised as bad management decisions made at the time of finalising agreements with independent power producers (IPPs).īut decision-makers should be given the benefit of the doubt.
Another disturbing factor in debt management is circular debt in the power sector, currently standing at slightly over Rs2 trillion, according to Geo News.
On the other hand, the defence budget stood at Rs 1,370 billion. In the 2021-2022 budget, the total amount reserved for debt servicing was Rs 3,060 billion. The country's external debt is around USD 122 billion, which, undoubtedly, because of its huge size and volume, requires a big financial boost and some support for debt servicing. Pakistan's Fiscal Responsibility and Debt Limitation Act, 2005 restricts the government not to cross the 60 per cent mark of the GDP. The biggest portion of Pakistan's annual budget goes to debt servicing, more than the amount reserved for defence spending, reported Geo News. Islamabad, November 3 (ANI): Pakistan's borrowings are about 95 per cent of the country's GDP, which indicate the nation continues to lack a big financial boost and some support for debt servicing, reported local media.
