xiaahmad
Chief Minister (5k+ posts)
TAJARBA NEWS:
ISLAMABAD: Pakistan’s debt affordability has weakened after it shifted to non-conventional loans by issuing $3.5 billion worth of international bonds, increasing its borrowing costs, according to the latest report by an international credit rating agency.
The concerns of the Moody’s Investor Services about Pakistan’s debt affordability come just as the International Monetary Fund (IMF) has projected that the country’s net external debt will increase by $3 billion to a whopping $68 billion when the current fiscal year ends. According to the lender, Islamabad will need $6.7 billion during the current year to service external debts alone.
The IMF also projects that Pakistan’s external debt will balloon to $74.5 billion by the end of the incumbent government’s five-year term. External debt stood at $60.8 billion in 2012-13. The PML-N came to power towards the end of that fiscal year. Moody’s reports also comes amid growing criticism against the PML-N government’s policy of borrowing funds by floating international bonds at very high interest rates. The government raised $500 million in September by floating dollar-denominated Eurobonds for 10 years at a rate of 8.25%.
A decline in exports and a negligible increase in foreign direct investment have increased the government’s reliance on expensive foreign borrowings. Pakistan’s external debt in percentage of exports is projected to be increased to 228.2% by end of the current financial year, up from 218% last year. Moody’s said the move by six countries, including Pakistan, towards more non-conventional financing has led to higher borrowing costs. The six countries borrowed $16.4 billion in last one and a half years, according to the agency. Pakistan borrowed $3.5 billion, accounting for 21.4% of the total figure.
http://www.dailytimes.com.pk/national/09-Nov-2015/pakistan-s-debt-affordability-weakened-report
ISLAMABAD: Pakistan’s debt affordability has weakened after it shifted to non-conventional loans by issuing $3.5 billion worth of international bonds, increasing its borrowing costs, according to the latest report by an international credit rating agency.
The concerns of the Moody’s Investor Services about Pakistan’s debt affordability come just as the International Monetary Fund (IMF) has projected that the country’s net external debt will increase by $3 billion to a whopping $68 billion when the current fiscal year ends. According to the lender, Islamabad will need $6.7 billion during the current year to service external debts alone.
The IMF also projects that Pakistan’s external debt will balloon to $74.5 billion by the end of the incumbent government’s five-year term. External debt stood at $60.8 billion in 2012-13. The PML-N came to power towards the end of that fiscal year. Moody’s reports also comes amid growing criticism against the PML-N government’s policy of borrowing funds by floating international bonds at very high interest rates. The government raised $500 million in September by floating dollar-denominated Eurobonds for 10 years at a rate of 8.25%.
A decline in exports and a negligible increase in foreign direct investment have increased the government’s reliance on expensive foreign borrowings. Pakistan’s external debt in percentage of exports is projected to be increased to 228.2% by end of the current financial year, up from 218% last year. Moody’s said the move by six countries, including Pakistan, towards more non-conventional financing has led to higher borrowing costs. The six countries borrowed $16.4 billion in last one and a half years, according to the agency. Pakistan borrowed $3.5 billion, accounting for 21.4% of the total figure.
http://www.dailytimes.com.pk/national/09-Nov-2015/pakistan-s-debt-affordability-weakened-report
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