Islamabad – February 28 (Online) Int’l: Friends of Business and Economic Reforms on Sunday sought long-term measures amidst high cost of debt servicing due to heavy loans, as the fiscal deficit has jumped to around Rs1.5 trillion in first half of 2020-21.
FEBR President Kashif Anwar sought growth-friendly policies, upgraded tax and social spending and active industrial strategies in close consultation with real stakeholders to achieve sustainable development goals. Kashif said that in terms of size of the economy, the budget deficit remained at last year’s level but in absolute terms the deficit went up.
The government had set the federal budget deficit target at 7.5% of GDP while it has obtained Rs1.2 trillion in loans to finance the deficit. FEBR President further that the fiscal deficit is going up despite the government claim of tight control over expenditures, while the only main head of expenditure that remains out of control is the debt servicing cost that jumped by 15 percent to nearly Rs1.5 trillion. Kashif said that Pakistan foreign debt and liabilities have been increasing rapidly over the last several years.
The government is forced to borrow heavily from external sources, including multilateral and bilateral creditors, and commercial lenders, in order to meet its foreign debt repayment obligations, as well as to finance its budget.
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