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Worrying increase in domestic debt

By : muhammad ibrahim bhatti

It is a matter of great concern that in the last two or three years, the level of national debt has been rising but it is not showing any positive effects on the national economy. In just one year, government debt increased from Rs 3.7 trillion to Rs 35.8 trillion. According to the State Bank of Pakistan, the federal government’s debt, which was Rs 32.1 trillion in November 2019, increased to Rs 35.8 trillion in November 2020. Interestingly, this amount does not include loans from the IMF and this amount of debt indirectly owed by the creditors to the government. This gives an idea of ​​how much the total government debt will be. It should be noted that in 2018, the federal government owed a debt of Rs 24.2 trillion, which has increased by Rs 13.2 billion per day. According to the central bank, the long-term debt of the federal government has increased significantly from Rs 16.6 trillion to Rs 19.1 trillion, while the domestic debt has increased from Rs 7.2 trillion to Rs 24.1 trillion in one year. This increase in debt is by no means conducive to a weak national economy, as most of our debt is spent on interest payments on past debts, while governments around the world borrow but incur costs. Most are related to development and public welfare. Given this situation, our government economists should consider and formulate economic policies that focus on minimal borrowing and domestic resources to promote domestic industries so that the economy is based on strong foundations rather than temporary ones.

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