ISLAMABAD: The finance ministry higher-ups have informed Finance Advisor Dr Abdul Hafeez Sheikh that the country’s external debt will increase by $2 billion to $60 billion and the domestic debt by Rs424 billion to Rs4.57 trillion by the end of 2010-11.
The officials briefed the advisor recently that there was a need to formulate and adopt a holistic debt management strategy.
The briefing focused on external debt, that it would continue to increase constantly in the next three years and it was expected to reach $62 billion by the end of 2011-12, whereas the domestic debt would cross Rs5 trillion by the end of 2011-12 and Rs5.42 trillion by the end of 2012-13.
A senior official of the ministry who participated in the meeting told Dawn that the adviser was informed that the debt-to-GDP ratio would gradually decline from 53.6 per cent to 51 per cent by end of 2012-13.
The domestic debt ratio would decline by 1.3 per cent to 26.4 per cent by 2012-13 while for external debt the ratio would be 24.6 per cent in the same period.
However the debt-to-GDP ratio would remain in the limits.
“As per the Fiscal Responsibility and Debt Limitations Act (FRDL) the total government debt will be 60 per cent of GDP,”
Dr Sheikh was informed the existing policy of the government was to adopt ‘prudent debt management techniques’ to reduce the burden of debt servicing in coming years.
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