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Govt pays $ 76.5 million interest to IMF& WB in last two years

Govt pays $ 76.5 million interest to IMF& WB in last two years

ISLAMABAD: Pakistan has paid $ 76.5 million as interest on loans to the International Monetary Fund (IMF) and World Bank (WB) in last two years.

“Pakistan has paid $ 68.6 million as interest /charges on IMF loans as well as $ 7.94 million as interest on World Bank loans during fiscal year 2013-14 till date” a well placed source at Finance Ministry told this scribe here on Wednesday.

Pakistan entered into a three year IMF Extended Fund Facility (EFF) program worth of $ 6.64 billion in September, 2013 and has received $ 3.25 billion in five tranches of $ 555 million each so far. These tranches were received in September, 2013, December 2013, March, 2014 and July, 2014 and $ 1050 million in December, 2014. The remaining amount will be disbursed in quarterly installments over the next 21 months.

Similarly, Pakistan obtained an amount of $ 2,246.34 million from the World Bank from during the said period of the year 2013-14 till date and an amount of $ 1,086.10 million has been disbursed so far. These loans will be utilized in energy, health, governance and agriculture sectors.

External debt remained unchanged at $ 64338 million in the fourth quarter of 2014 and it averaged $ 49246.37 million from 2002 until 2014, reaching an all time high of $ 66490 million in the third quarter of 2011 and a record low of $ 33172 million in the third quarter of 2004. External debt is a part of the total debt that is owed to creditors outside the country

In October 2014, every Pakistani was burdened with the debt and liabilities of over Rs101,338 against Rs90,772 in June 2013 as the debt on each Pakistani was Rs80,894 in October 2012 whereas it was only Rs37,170 in early 2008.

It is believed that corruption, misrule, massive tax evasion and poor economic policies burdened the nation with such an alarming rise in the total debts and liabilities because huge government borrowing from the banks the pre-tax profits of the banking sector have greatly risen in the recent years. 

Similarly, in September 2014, Pakistan’s external debt and liabilities reached alarming level at $65.533 billion after lending from different financial institutions and global banks. The international donors were asking for enhancing foreign exchange reserves, curb deficit and increase development project financing.

These loans were standing at $43.496 billion showing the straight increase of more than $4.9 billion due to floating of Eurobond of $2 billion along with receipts from different financial agencies. These debts include multilateral and bilateral loans from different agencies such as Paris Club, Euro and Sukuk Bonds, military debts, Saudi Fund for Development, SAFE China deposits and NBP/BOC deposits.