Is Pakistan's debt situation more severe than IMF prediction..!?

Our neighboring country pakistan has been facing a severe economic crisis recently. A study has come out warning that it is getting worse than we thought. The Islamabad-based organization Tabatlab has released the results of a recent study on the economic status of Pakistan. It states that pakistan is heading towards the worst economic disaster. In particular, Pakistan's debt situation is spreading like wildfire and is worse than the international Monetary Fund's assessment. It is worth recalling at this juncture that the international Monetary Fund has assessed Pakistan's economic crisis as manageable.  pakistan is currently facing a huge debt deficit, which could trigger a disastrous economic cycle, the report warned. Pakistan's per capita debt increased by 36 percent from 823 USD in 2011 to 1122 USD in 2023. Pakistan's GDP per capita has declined from USD 1295 in 2011 to USD 1223 in 2023. The disparity between credit and income growth rates is widening in Pakistan.
For example, a child born in 2011 had a debt of PKR 70,778 (Pakistani currency), but the same has risen to PKR 3,21,341 for a child born in 2023, the report said. Pakistan's external debt has almost doubled since 2011, while its domestic debt has increased sixfold. The Tabatlab report attributes this to Pakistan's status as a consumption-driven and import-driven economy with no investment in manufacturing or industry. Social security, health, education, and climate change adaptation strategies will require more funding in the coming days. The report says that pakistan is going to face economic disaster by taking more and more loans. According to the report, written by Jesus Alauddin and Amarhabib Khan, Pakistan's external and domestic debt has increased significantly since 2011. Meanwhile, the economy remains unstable due to a lack of governance and natural calamities. The report therefore recommends that pakistan, which is vulnerable to climate-related disasters, should generate significant financial resources for recovery and relief. Pakistan's debt crisis will not go away without change and comprehensive reforms, it said. The report suggested that rising debt levels hamper economic growth because they favor consumption over productive investment, a trend that can be partially avoided if the trend is reversed.
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Sowmiya Sriram

21/02/2024 11:59 AM