Finance Minister Dr Shamshad Akhtar, Wednesday, said that the government would have to emphasize 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%. She further said that it was clearly 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.
While speaking Seminar on ‘Public Debt – Issues, Challenges and Way Forward’ here she said 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
She said 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 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.