Tabadlab’s Post

Eyebrows will be raised at the timing of this article and some people would dismiss it outright as negative propaganda but in my view this is the most timely reminder for the policymakers in Pakistan to address the real issue i.e debt sustainability. The numbers speak for themselves and ignoring this problem is not helpful for the country. With a 3 year USD 7 billion IMF facility being approved today, the country has enough breathing space to start addressing this issue, rather than going for the usual “kicking the can down the road” approach. The author has put it very aptly, “This path is hard and long. But the alternative is worse: a possible disorderly debt default.” Let’s not “celebrate” the “bailout” and focus on a strategy to avoid these painful recurring episodes in the future. #pakistan #imf #debtsustainability #debtreprofiling #sbp #china #pakistaneconomy #restructuring

Pakistan's total federal debt surpassed Rs 70 trillion, driven by substantial borrowing to cover the fiscal deficit, according to the State Bank of Pakistan (SBP). In just two months of FY2024-25, the government’s debt rose by 2.1%, reaching Rs 70.362 trillion, an increase of Rs 1.448 trillion. This surge was primarily due to a significant rise in domestic debt, which grew by Rs 1.179 trillion, bringing the total domestic debt to Rs 48.34 trillion. Meanwhile, external debt increased modestly by 1.2% to Rs 22.023 trillion, aided by a slight strengthening of the rupee. This highlights the ongoing challenges in managing fiscal health amid rising expenditures and slower revenue collection. #UpdatesByROW #Updates2024 #PakistanEconomy #FederalDebt #FiscalDeficit

In my article published in today's Express Tribune, I argue that a "strategic default" on external debt is the only way to put Pakistan's faltering economy back on track. The present course of action which envisions taking on more and more debt to pay down interest on previous loans is not sustainable for very long. It is delusional for the government to think that it can continue to do this ad eturnum. There always comes a point when a house of cards crashes to the ground. #Pakistan #economy #foreigndebt #IMF

The IMF has described Pakistan's external debt repayment capacity as fragile, estimating the country’s external financing needs to reach $62.6 billion over three years under the Extended Fund Facility (EFF) program. Over a five-year period (2024-29), these needs could rise to $110.5 billion. The IMF projects $18.813 billion in financing needs for the current fiscal year, escalating to $23.714 billion by 2026-27. High risks from public debt, low reserves, and sociopolitical factors could undermine repayment capacity. However, a significant reduction in gross financing requirements for FY25, down to $18.8 billion, offers a more optimistic outlook. #PakistanEconomy #IMF #ExternalDebt #FinancialChallenges #EconomicOutlook #DebtRepayment #PublicDebt #SociopoliticalFactors #FinancingNeeds #ExtendedFundFacility #FiscalPolicy #EconomicStability #DebtCrisis #PakistanUpdates

Bloomberg's coverage of Tabadlab's "A Raging Fire" reports the unsustainable nature of Pakistan's debt, building on analysis from Ammar Habib and Zeeshan Salahuddin. As the debt crisis looms over the incoming government, "A Raging Fire" unpacks the country's debt profile and proposes a series of policy actions to move towards economic stability. Read the full report here: https://lnkd.in/dbk9v5Zf #ARagingFire #debtcrisis

The Debt Policy Statement presented in January 2024 reveals an increase in Pakistan's public debt by the end of September 2023. External debt rose to $86.36 billion, up from $84.1 billion in June, while domestic debt increased to Rs39.7 trillion from Rs38.81 trillion. Approximately 58% of the federal fiscal deficit was financed domestically, with the remaining 42% sourced externally. Significant shifts include the retirement of Rs452 billion in short-term debt and the issuance of Rs2.2 trillion in Pakistan Investment Bonds. In the fiscal year 2023, Pakistan received $9.889 billion in disbursements against $14.73 billion in repayments, with major inflows from the Asian Development Bank, World Bank, and IMF. #pakistan #debt #adb #wb #imf

The federal government has disclosed that Pakistan's total debt has surged to Rs 71 trillion as of June 2024, with domestic debt at Rs 47 trillion and foreign debt at Rs 24 trillion. The debt repayment schedule includes Rs 18.7 trillion in 2024 and continues with significant payments until 2031. A 3-year economic plan aims to increase provincial shares in the federal budget from 39.4% to 48.7% by 2027, with allocations rising to Rs 10,350 billion by 2026-27. The total debt is projected to reach Rs 79.7 trillion by the end of the fiscal year. #EconomicChallenges #DebtManagement #PakistanEconomy #FederalBudget #FiscalPolicy #EconomicReforms #FinancialStability #ProvincialShares #StrategicPlanning #PakistanFinancials #dailydawns

The IMF has described Pakistan's external debt repayment capacity as fragile, estimating the country’s external financing needs to reach $62.6 billion over three years under the Extended Fund Facility (EFF) program. Over a five-year period (2024-29), these needs could rise to $110.5 billion. The IMF projects $18.813 billion in financing needs for the current fiscal year, escalating to $23.714 billion by 2026-27. High risks from public debt, low reserves, and sociopolitical factors could undermine repayment capacity. However, a significant reduction in gross financing requirements for FY25, down to $18.8 billion, offers a more optimistic outlook. #PakistanEconomy #IMF #DebtRepayment #EconomicStability #Finance

Pakistan’s external debt has burgeoned into a formidable economic challenge, posing significant hurdles to its sustainable development and fiscal stability. As the nation grapples with the burden of mounting debt, there arises a pressing need to critically assess the feasibility of repayment from conventional revenue streams.

The IMF has labeled Pakistan’s external debt repayment capacity as fragile, estimating the country will require $62.6 billion in external financing over the next three years under the Extended Fund Facility (EFF) program. Looking ahead, these financing needs could surge to $110.5 billion between 2024 and 2029. For the current fiscal year, the IMF anticipates financing needs of $18.813 billion, rising to $23.714 billion by 2026-27. High public debt, low foreign reserves, and sociopolitical instability pose significant risks to Pakistan’s repayment ability. However, a reduced gross financing requirement for FY25, dropping to $18.8 billion, provides a more hopeful scenario. . . . #PakistanEconomy #IMF #DebtRepayment #EconomicStability #Finance #Tribunetrends