The Economic Affairs Division on Friday said that the net addition to the external public debt during FY2018-19 was only $2.29 billion which is the lowest in the last three years.
The division said in a press release, “The total external inflows during FY 2018-19 were $10.186 billion, including grants of $330 million, while external loans obtained by the government during the year were $9.85 billion with the government making payment of $8.94 billion on account of retirement of external debt and debt servicing.”
So the net addition to the external public debt clocked in at $2.29bn, it added.
Showing a comparison, the economic affairs division further said that net additions to the external public debt during the last three fiscal years [FY 2015-16 to FY 2017-18] were $6.82bn, $4.77bn and $8.64bn respectively.
It added that the Asian Development Bank (ADB) and the World Bank (WB) disbursed $541.17 million and $652.75mn respectively during FY 2018-19 as compared to $945.69mn and $817.54mn during FY 2017-18.
“A slowdown in disbursement from development partners during the outgoing fiscal year was mainly due to a period of political transition in the country,” the press release read, adding that during the interim government, there was a complete ban by the Election Commission of Pakistan on new development projects and relevant competent forums [ECNEC and CDWP] were not in place for quite some time.
“After the formation of the elected government, provincial governments’ Annual Development Plans were approved at a very delayed stage. Consequently, approval of new lending operations and project-related disbursement were slow during the initial months and started to pick-up during the second half of the year.”
The division highlighted that budgetary support was also not available due to the weak macroeconomic position inherited by the incumbent government.
“With the restoration of confidence of international financial institutions and good prospects of budgetary support, the government is expecting very strong inflows from its development partners this year.”
According to the statement, the government resorted to commercial borrowing only as a contingency measure to strengthen foreign exchange reserves and to maintain stability in the market