Islamabad: Pakistan’s debt burden has increased to an alarming level. According to a recent report released by the Economic Policy and Business Development, every Pakistani citizen currently owes an average of Rs 318,252, while 10 years ago the same burden was Rs 90,047 per capita.
The report said that debt has tripled over the past decade and is growing at an average rate of 13 percent per year. Worryingly, the debt burden is doubling every six years, which is increasing fiscal pressure.
Experts have suggested that the government should immediately adopt fiscal discipline and widen the tax net to increase revenue. Along with this, it has been recommended to reduce the policy rate from the current 11 percent to 9 percent, which will not only reduce the interest cost on loans by Rs 1.2 trillion but also make domestic businesses more competitive.
The report warns the government that Pakistan’s debt situation is much worse than other countries in the region, as Pakistan’s outstanding debt is equivalent to 70.2 percent of the country’s economy. This rate is the highest in the region and has become a major threat to the country’s economic stability.
According to economists, this debt situation could worsen in the future if timely measures are not taken. However, with better fiscal policy and timely reforms, the growing debt burden can be controlled and the economy can be put on a sustainable path.
